Global IT–Alive and Kicking

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

Take, for instance, B2B e-commerce. According to GartnerGroup, this will leap to a mind-numbing $7 trillion by 2004, up from a mere $145billion in 1999. This would indicate a fundamental shift in the way companies dobusiness. 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 onlinetransactions. Nevertheless, by 2004, B2B e-commerce will represent 7% of theforecasted $105 trillion total global sales transactions.

Growth catalysts

The main catalyst behind this huge growth will be thee-market making activity. An e-market maker is an organization that develops aB2B, Internet-based, e-marketplace of buyers and sellers within a particularindustry or geographic region. E-market makers, says Gartner Group, are expectedto facilitate around $3 trillion of sales transactions, a little over third ofthe overall B2B market. Leading e-market makers include VerticalNet, PaperExchange and Chemdex.

High-Growth 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)

NA

9.0 billion

Source: Gartner Group, IDC

Though not on the same scale, growth in IT services is poisedto outstrip all others. The worldwide IT services market place will continue itspace. It will become the largest and fastest-growing segment in the IT industryas it rises from $605 billion in 1994 to cross $1 trillion in 2004. Asbusinesses struggle with the huge demand for IT skills, an increasing number ofthem are looking to outsource these skills. The market, according to GartnerGroup, will be fueled by end-user demand for external service providers–foreverything 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 globaldata storage management segment, with new license revenue totaling $4 billion, a47% increase over the 1998 revenue. This is expected to rise to $15 billion by2004. At present, the storage management segment represents 53% of the overallmarket. However, with strong growth in the storage infrastructure and theenterprise storage resource management segments, the share of data management isexpected to drop to 46% by 2004.

Good days ahead

If the e-market makers have reason to rejoice, companies likeOracle and IBM too can look forward to good days ahead. The worldwide databasesoftware market–the two companies compete neck to neck to lead–is expectedto 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 businessintelligence software, the market grew by 18% in revenue terms. In fact, the Y2Kconcerns had limited impact on database spending. By 2004, it is expected thatthe NT platform revenue will almost equal that of the Unix platform. The marketwill be driven by Internet-related applications, electronic commerce and contentmanagement, among others.

If worldwide things are looking up, the Asia-Pacific marketis positively booming. Given the resilient pace maintained in 1998 and 1999,International Data Corp expects the overall data communications market in the APregion alone to touch $9 billion by 2004. This will be on account of economicresurgence, telecommunication industry liberalization and increased Internetusage. The largest component of this will be the LAN market–which is likely togrow at 18% over the forecast period to reach $5.8 billion by 2004. The remoteaccess 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 fastestgrowth will be in India, which will grow at a compounded annual growth rate of36%–pushed primarily by the growth of Internet and the related technologies.

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

DQ

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