Global IT–Alive and Kicking

If you thought the worldwide boom in the infotech sector was
over, think again. A look at estimates of the growth expected in different
segments of the industry by leading market intelligence and research groups like
Gartner and International Data Corp (see table) will convince you that it hasn’t,
and won’t.

Take, for instance, B2B e-commerce. According to Gartner
Group, this will leap to a mind-numbing $7 trillion by 2004, up from a mere $145
billion in 1999. This would indicate a fundamental shift in the way companies do
business. Bear in mind, though, that not all of this accounts for new business;
they are merely a transition of the current non-electronic business to online
transactions. Nevertheless, by 2004, B2B e-commerce will represent 7% of the
forecasted $105 trillion total global sales transactions.

Growth catalysts

The main catalyst behind this huge growth will be the
e-market making activity. An e-market maker is an organization that develops a
B2B, Internet-based, e-marketplace of buyers and sellers within a particular
industry or geographic region. E-market makers, says Gartner Group, are expected
to facilitate around $3 trillion of sales transactions, a little over third of
the overall B2B market. Leading e-market makers include VerticalNet, Paper
Exchange and Chemdex.

IT Segments


At present

By 2004 ($)

B2B e-commerce

145 billion

7.3 trillion

IT services

605 billion

1.3 trillion

Management software

4.2 billion

14.7 billion

Database Software

8 billion

12.7 billion

Data communications (AP)


9.0 billion

Source: Gartner Group, IDC

Though not on the same scale, growth in IT services is poised
to outstrip all others. The worldwide IT services market place will continue its
pace. It will become the largest and fastest-growing segment in the IT industry
as it rises from $605 billion in 1994 to cross $1 trillion in 2004. As
businesses struggle with the huge demand for IT skills, an increasing number of
them are looking to outsource these skills. The market, according to Gartner
Group, will be fueled by end-user demand for external service providers–for
everything from product support to e-business transformation services. In fact,
business management services are projected to grow at the fastest rate of 21%
through 2004.

Explosive growth was also witnessed in 1999 in the global
data storage management segment, with new license revenue totaling $4 billion, a
47% increase over the 1998 revenue. This is expected to rise to $15 billion by
2004. At present, the storage management segment represents 53% of the overall
market. However, with strong growth in the storage infrastructure and the
enterprise storage resource management segments, the share of data management is
expected to drop to 46% by 2004.

Good days ahead

If the e-market makers have reason to rejoice, companies like
Oracle and IBM too can look forward to good days ahead. The worldwide database
software market–the two companies compete neck to neck to lead–is expected
to grow to $13 billion by 2004 from its present $8 billion. Already in 1999,
buoyed by the growth of new Internet applications and demand for business
intelligence software, the market grew by 18% in revenue terms. In fact, the Y2K
concerns had limited impact on database spending. By 2004, it is expected that
the NT platform revenue will almost equal that of the Unix platform. The market
will be driven by Internet-related applications, electronic commerce and content
management, among others.

If worldwide things are looking up, the Asia-Pacific market
is positively booming. Given the resilient pace maintained in 1998 and 1999,
International Data Corp expects the overall data communications market in the AP
region alone to touch $9 billion by 2004. This will be on account of economic
resurgence, telecommunication industry liberalization and increased Internet
usage. The largest component of this will be the LAN market–which is likely to
grow at 18% over the forecast period to reach $5.8 billion by 2004. The remote
access market will also quadruple in the next five years to hit $1.4 billion.
This will be primarily due to the lack of an installed base in emerging markets.
China will remain the leader in terms of total market share, though the fastest
growth will be in India, which will grow at a compounded annual growth rate of
36%–pushed primarily by the growth of Internet and the related technologies.

So, if forecasts are anything to go by, the best days for the
industry are yet to come. And even if the numbers fall somewhat short,
manufacturers and industry watchers can be sure that there will be plenty of
action in the near future. 


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