Application Infrastructure Providers Have a $13.9 Billion Opportunity Worldwide Ahead of Them, According to IDC

FRAMINGHAM, MA- JUNE 5, 2002 – The worldwide market for application infrastructure providers (AIP) services will increase to $13.9 billion by 2006, for a 2001-2006 compound annual growth rate (CAGR) of 38.5%, IDC says. IDC defines AIPs as vendors that manage the core infrastructures (e.g., servers, storage, networks, operating systems, and datacenters) for customers on an outsourced, or managed service, basis. AIP services are provided from third-party Internet datacenters.


"AIPs will become the primary providers of outsourcing and computing utility services," said David Tapper, program manager, Networked Infrastructure Management Services research. "AIPs will ultimately replace the traditional outsourcing model, which is centered more on managing onsite customer systems while taking control of internal IT departments."

From a regional perspective, IDC's research indicates the United States will remain the overall leader for AIP opportunities, with total expenditures exceeding more than $7.19 billion by 2006. However, Western Europe and Asia/Pacific will experience dramatically higher annual growth rates for AIP expenditures of approximately 60% and 43.5%, respectively.

The AIP market is experiencing major changes involving the delivery of services and the consolidation of players looking to take the mantle of leadership in this market, according to IDC. While the majority of players in the AIP space will include traditional IT outsourcers and telecommunications providers, IDC reveals that the expected few larger players may become the utility providers of nearly all communications services for decades to come.

To improve their chances of success, IDC recommends that AIPs show customers significant ROI, leverage automated service environments to improve service and cut costs, develop strong channel strategies to reach midmarket, gain vertical industry knowledge, enable end-to-end computing services from application through the "last mile," develop "migration" strategies, partner with key complementary service providers and technology vendors, and educate customers.

In this new study, Worldwide Application Infrastructure Provider Forecast, 2001-2006 (IDC #27080), IDC presents market sizing and five-year growth forecasts that include worldwide regions, service activities, vertical industries, and application environments. The report defines the AIP market and describes the influence of worldwide industry trends and customer preferences. Key market trends, opportunities and challenges facing AIPs, and recommendations are also discussed.

To purchase this document, call IDC's volume sales hotline at 508-988-7988 or email

For more information about IDC's Networked Infrastructure Management Services research, please contact Jill Toole at 508-988-6915 or by email at

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in- depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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