Demand for Packaged Solutions to Drive IT Investment Across Western European Vertical Markets, Says IDC
MILAN – FEBRUARY 15, 2007 – Based on a recently published survey study series, IDC anticipates that demand for packaged solutions will continue to drive IT investments across Western European companies, with opportunities for each of the different solutions. Companies are expected to maintain a rather cautious attitude towards IT investments, yet signs of a recovery are emerging, as 34% of companies expect to increase their total IS budget in 2006 and 22% expect to increase their external IT spending budget.
The research indicates that there will be opportunities for ERP solutions in manufacturing and transport/communications/utilities (TCU), among others, while CRM opportunities will lie in integration, modifications, or enhancements of old CRM systems (verticals with an already high installed-base), first-time implementations (retail/wholesale), and complete system replacements (insurance/other finance). Meanwhile, significant opportunities for industry-specific solutions are expected in process manufacturing and TCU, which similarly represent the most interesting segments for supply chain solutions. "Companies across the Western European vertical market landscape show a growing interest in software as a service as an alternative to traditional software. Nonetheless evidence suggests that these companies are still rather unwilling to adopt SaaS for functionalities that directly impact core business processes."
Education, TCU, and banking stand out in terms of expected external spending increases with banking yet again at the forefront of the opportunity ladder. "Sparked by improving economic conditions, IT investment in Western Europe is gaining momentum and overall the market potential is quite encouraging for vendors. Survey data points to this, confirming that in 2005 companies in the vertical markets studied spent a larger share of their IS operating budgets externally. Furthermore, some 22% of interviewed companies are expected to increase their external IT spending during 2006, led by above average percentages of companies planning increases in TCU and banking," said Nina Bonagura , senior research analyst, European Vertical Markets .
The IDC studies, 2006 Solution Priorities in Western European Vertical Markets: An IDC Survey ( Doc #M02N , December 2006) and 2006 Western European Vertical Markets IS Operating Budget Dynamics, Channel Selection and Vendor Satisfaction: An IDC Survey ( Doc #M03N , December 2006) are based on the results of IDC's European Vertical Markets survey, carried out in June 2006 among 1,950 companies with more than 20 employees in the top 5 Western European countries (UK, Germany, France, Italy and Spain).
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