eBusiness Spending Bucks the Worldwide IT Spending Trend, According to IDC

FRAMINGHAM, MA – JULY 24, 2002 – While IT spending worldwide remained flat in 2001 and declined in the United States, ebusiness spending grew by more than 20%. According to IDC, this growth will continue as companies make ebusiness one of their top investment priorities.


"The dot-com crash didn't kill anything except hundreds of ill-conceived companies," said John Gantz, IDC's Chief Research Officer. "In fact, it actually helped usher in the real 'new economy'," the one where businesses, schools, and government agencies from around the world are steadily integrating Internet technologies into their normal business operations."

According to IDC's eWorld 2002 survey of more than 2000 companies with 25 or more employees in Finance, Real Estate, Insurance, Manufacturing and Retail/Wholesale in 10 countries, respondents said they allocate 12% of their IT budgets to Web-based initiatives. This is almost double what they allocated before the dot-com crash.

The reasons companies are investing in ebusiness are explained by the following IDC survey findings:

More than 50% of respondents said investing in Web initiatives was important or very important in improving coordination with customers and suppliers.

42% of respondents said they invested in ebusiness because they wanted to cut costs. Likewise, 42% of respondents admitted they did it because their customers demanded it.

40% of respondents felt Web initiatives had a significant impact on improved customer service.

Overall, IDC expects a boom in the growth of transaction-heavy Web sites, as companies beef up their commerce engines, automate their supply chains, and integrate with customer service systems.

"eBusiness is one of the top investment priorities for companies – right up there with security," Gantz said. "Companies now have enough operating experience to understand that ebusiness is as prosaic as it gets. It cuts costs and generates revenues."

IDC's eWorld 2002 Survey is a study of the Internet and eBusiness opportunity across 10 countries and 2000 business sites. For more information about IDC's eWorld 2002 Survey, call Amie White at 508-935-4653 or at awhite@idc.com.


The Center for Research on Information Technology and Organizations (CRITO) is a multidisciplinary research unit at UC Irvine that studies the impact of technology on corporations, society and organizations. With over 10 years of focused Global Technology research experience, CRITO and its faculty associates are experts in the field. CRITO is one of only 50 industry-university cooperative research centers in the U.S. supported by grants from the National Science Foundation and the only one in the niche of Information Technology impacts. In addition to Global Technology, CRITO houses experts on Information Technology Outsourcing, Returns on Information Technology Investments, Technology in the Home, Technology and Remote Collaboration and many more topics. For additional information about CRITO, visit www.crito.uci.edu.

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 www.idc.com.

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


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