IDC Forecasts Worldwide Knowledge Management Services Spending Will Exceed $12 Billion by 2005
FRAMINGHAM, MA – JUNE 5, 2001 – Knowledge management (KM) is gaining momentum. According to IDC, worldwide KM services spending will increase at a compound annual growth rate (CAGR) of 41%, from $2.3 billion in 2000 to $12.7 billion in 2005. This growth comes as companies turn their focus away from technology issues toward issues involving people and processes.
"Knowledge management is the new frontier for most companies," said Greg Dyer, senior research analyst for IDC's Knowledge Management Services program. "Corporate managers understand the benefit of capturing and sharing intellectual capital, but they do not understand the process of putting it into action. As a result, there is a great opportunity for vendors that can develop and apply KM solutions around specific business problems that clients are trying to solve, such as employee retention. By doing so, vendors help KM lose its ambiguity and become a value-adding tool."
According to IDC, the United States is leading efforts in the KM market; however, its share of worldwide KM services spending will dip to 48% in 2005, from 62% in 1999. Non-U.S. regions will outpace the United States in KM spending growth, with a 2000-2005 CAGR of 48%. By comparison, U.S. spending will be 35% during this time.
Along with implementation growth, spending on maintenance and operations will increase as more companies come to need help in the daily upkeep of their KM initiatives. IDC predicts spending in these two activity segments will increase at CAGRs of 52% and 48%, respectively. Training will also be very important to develop buy-in within organizations. "One of the primary challenges that companies will need to address is how to get their employees to understand and participate in their KM programs," Dyer said.
IDC believes vendors who promote themselves as solution providers stand the best chance of surviving in this competitive landscape. "In addressing specific business problems, vendors must be prepared to define their service mixes through consulting, implementation, training, operations, and maintenance. If a vendor cannot provide these services using internal resources, it will need to partner with firms in the appropriate categories to gain a competitive advantage," Dyer added.
IDC’s report U.S. and Worldwide Knowledge Management Market Forecast and Analysis, 2000-2005 (IDC #B24658) analyzes the market trends and forces that either bolster or inhibit the growth of the KM services industry. Worldwide KM services spending forecasts are provided by region and activity segment through 2005. To purchase this report, contact Jim Nagle at 1-800-343-4952, extension 4549, or at firstname.lastname@example.org.
IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.
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