Companies’ Desire for Complex Internet and eCommerce Capabilities Drives Huge Opportunities in the Internet Services Market, IDC Says

FRAMINGHAM, MASS., FEBRUARY 8, 2000 — The Internet frenzy to establish a Web presence has given way to newer and more complex initiatives. Companies are scrambling not only to incorporate Internet and ecommerce capabilities, but to tie these capabilities to their overall business value. According to IDC, the increased level of complexity they are looking for and the speed at which they need it are fueling enormous opportunities in the Internet services market.

"No longer is relatively simple front-end Web development the project de jure. In its place is a more complex project involving creating ecommerce sites that need to be incorporated with back-end systems. These projects are meant not only to help organizations establish a Web presence, but to actually transform part of their business to compete in an Internet economy," said Pooneh Fooladi, an analyst with IDC's Internet Services research program. "The increased requirements of these projects are causing more companies to seek the assistance of outside service providers. This trend is creating huge opportunities for service firms to offer consulting, implementation, and operations services in the Internet services market. "

According to IDC, vendors with heritages in the system integration, interactive design, IT product, telecommunication, and management consulting markets all have the potential to cash in on the Internet services opportunity. Additionally, the large demand is spawning more growth for the Internet service firm: a relatively new type of company with creative, technical, and strategic skills that are specifically targeting this opportunity.

The growth and increasing complexity of projects is shaping the dynamics of this market. The fierce competition within the Internet economy is fueling clients' needs for faster deployment of scaleable sites. Service firms are working to align their offerings to fit these market needs. "Service firms looking to increase their share in the Internet services market will need to create a business model with flexible service, pricing and delivery models, as well as ramp up their efforts to acquire personnel with a varied skill set so that they will be able to deliver end-to-end Internet services quickly," Fooladi said.

In its new report, Internet and eCommerce Services Market: A Competitive Segmentation and Analysis for the Year 2000 (IDC #B21016), IDC analyzes the Internet service market. The report includes benchmarks for the average size of engagement, average and median revenue by service category, and revenue percentages according to service and geographic region. The report outlines the market's competitive landscape and analyzes each vendor's leadership positioning. The report also examines key trends in the industry and makes recommendations for being competitive in the market. Additionally, supplier trends are discussed. Finally, the report profiles the following vendors: Andersen Consulting, AppNet, Cambridge Technology Partners, Computer Sciences Corporation, Cysive, Deloitte Consulting, EDS, Ernst & Young, Fort Point Partners, IBM Global Services, Intelligroup, KPMG, Lante, Modem Media.Poppe Tyson, Organic Online, PricewaterhouseCoopers, Proxicom, Sapient, US Interactive, USWeb/CKS, and Viant. To order a copy of the report, contact Sally Donovan at 1-800-343-4952, ext. 4219 or at sdonovan@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

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

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