IDC Says to Take Advantage of U.S. Web Spending, IT Vendors Need to Think Small

FRAMINGHAM, MASS., MARCH 14, 2000 — Small businesses should become a big target for IT vendors trying to profit from U.S. Web spending. According to IDC, U.S. companies with fewer than 100 employees will devote more IT dollars to the Web than any other segment except the government and spend almost 13% more than the next-largest market segment by 2003.

"In terms of U.S. Web spending, the most important theme in the next four years will be the rise of small companies," said Rob Rosenthal, an analyst with IDC's Internet and eCommerce Strategies research program. "Currently small companies spend the smallest percentage of their IT budgets on the Web, but that will change, and small companies will grow faster and larger than any other group. Vendors that have always sold to major corporations and enterprises will have to learn how to think small."

A small company's average Web purchase will total only a fraction of a larger company's average purchase, but what small businesses lack in size they will make up for in quantity.

Spending on the Web will become an increasingly important component of overall IT purchases. According to IDC, in 1999 Web spending represented just over 12% of all U.S. IT spending. By 2003, that number will more than double to 27%. This year alone, U.S. Web spending will jump almost 39% from $86 billion in 1999 to $119 billion.

"One factor that will drive Web spending is the fact that two big threats — the European Union's conversion to the euro and the Y2K bug — have come and gone. Businesses are now free to plan long-range Web strategies without having to wonder if their systems are compliant with the latest warnings," Rosenthal said.

IDC's new report The 2000 U.S. Web Spending Model, Version 2.3 (IDC #B21683) gives a complete account of how business, government, and education will devote increasing percentages of their IT budgets to the Web and analyzes how IT vendors can take advantage of U.S. Web spending. The report includes a forecast for U.S. IT and Web spending through 2003. The Web spending forecast is segmented by company size and industry as well as internal versus external spending. The report also discusses trends in U.S. Web spending. To order a copy of the report, contact Demetra Georgakopoulos at 1-800-343-4952, ext. 4496 or at dgeorgakopolous@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 43 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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