1998: A Precipitous Time For Europe’s IT Industry, According To IDC

LONDON, Feb. 2, 1998 — From an economic and IT perspective the issue of the single European currency looms large in the horizon with set of countries to participate shortly to be announced shortly. A new research bulletin from International Data Corporation (IDC) outlines some of the key issues facing the IT market in Europe this year.

Uncertainty over the initial participants characterizes the nature of the European Monetary Union (EMU) project in recent years, "The criteria set out at Maastricht was perhaps the last time we had any clarity on this issue," writes analysts in IDC's European IT Market Perspectives group. "We are now on the edge of going operational with EMU and still some basic elements of accounting practice have yet to be ironed out. The accounting software companies have done what they can for customers, but we think there is still a great deal of work to be done."

The Year 2000 crisis had steered a great deal of attention away from EMU, which seemed, superficially, far less spectacular a concern. The launch of EMU poses a long term headache for European businesses, but once it is up and running, most

will be glad they are no longer exposed to currency fluctuations within Europe -assuming the European Currency Unit is stable. The multifarious macro-economic ramifications that surround the EMU is one of the key reasons why ITconsiderations have not become a priority. However, if you "don't get the infrastructure sorted, the economic debate remains academic. EMU can't work without banks and companies being able to run with it" reveals IDC.

As mentioned, the millennium "bug" has stolen the show in the apocalyptic headline stakes, and the issue will undoubtedly escalate in hyperbole over the coming year. "Operational issues within businesses have remained a higher priority in recent years, but the beginning of 1998 might just make something click in the minds of directors," said Andrew Doyle, analyst, European IT Market Perspectives. "With EMU on our doorstep as well as ongoing IT strategic issues, IS managers and directors are faced with Hobson's choice. Nobody likes spending money that does not drive revenue growth, and Y2K is a maintenance issue, after all." And it gets worse. The escalation of fees demanded by skilled people are inflating the costs. "The Blue Chip companies will dig deep and get the best people," said Doyle, "but who will take care of the little guys?"

This bulletin, Setting the Scene for the 1998 European IT Market (#A21EB), is available from your local IDC office.

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