IDC Expects Healthy Worldwide Investments in IT with Highest U.S. Growth Rates In Healthcare and Communications and Media

FRAMINGHAM, MA – February 8, 2006 – IDC expects IT spending to reach $496.7 billion in the U.S. and $1.3 trillion on a worldwide level by 2009. While the communications and media, healthcare, financial, and consumer markets are expected to be the most sought-after industries in terms of growth opportunities, government and discrete manufacturing will continue to account for the largest percentage of overall IT spending within the U.S. through 2009. Analysis of the global five-year IT spending forecast, by industry and public sectors, yields similar trends with government and discrete manufacturing being the largest IT spenders, followed by banking.

Worldwide IT Spending Growth by Vertical Industry, 2005-2009 CAGR

Industry CAGR Industry CAGR

Banking 4.8% Insurance 3.4%

Communications and Media 5.6% Process Manufacturing 4.3%

Construction 4.2% Resource Industries 4.9%

Consumer/Home 3.9% Retail 4.3%

Discrete Manufacturing 4.0% Services 3.9%

Education 3.7% Trans. & Trans. Services 4.3%

Financial Markets 4.8% Utilities 5.0%

Government 5.0% Wholesale 4.0%

Healthcare 5.5%

Total Worldwide IT Spending Growth, 2005-2009 4.5%

Source: IDC, 2006

In the United States, a major portion of government IT spending will stem from the continued need for IT services in order to help privatize large installations that have previously been the domain of government employees. IT services spending alone within the government sector is expected to reach $43 billion by 2009.

IDC's Worldwide Vertical Markets Program Manager, Anne Songtao Lu, explained that a major catalyst driving continued growth within the nation's manufacturing sector will be "the globalization of the industry and the widespread production and sourcing locations, which call for centralized ERP systems so that manufacturers can more efficiently manage accounting and fulfill corporate governance requirements, thus driving investment in network equipment to build a fully managed global IP VPN."

As for trends within some of the higher growth U.S. markets, Lu noted "a large amount of the spending in the healthcare industry will be attributed to the purchase of volume servers and software." She further added that "the long-term goal of the industry is to wire the entire healthcare infrastructure in an intelligent national network and decrease medical errors such as mistakes involving drug dosages or dangerous interactions between medications." Meanwhile, the biggest market opportunities in the consumer sector are anticipated to be related to peripherals, storage, and IT services.

IDC's IT Spending by Vertical Market 2005-2009 Forecast Update (IDC #34647) provides a five year forecast update for information technology spending within the United States by 17 vertical markets, as well as insights into the prioritization of IT spending within these industries. Similarly, the Worldwide IT Spending by Verticals 2005-2009 Forecast Update: North America, West Europe, Asia Pacific, Rest of the World (IDC #34609) details the latest comprehensive IT spending forecasts by 17 vertical markets within four regions.

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