IDC’s Frank Gens Maps Difficult Growth Odyssey For IT Industry; Destination: One Billion Users Online

FRAMINGHAM, Mass., March 19, 1998 — Sustained high growth in the information technology (IT) industry will require aiming for the lofty goal of one billion online users worldwide, proclaimed Frank Gens, senior vice president of Internet research for International Data Corporation (IDC), the leading provider of IT data, analysis, and consulting.

Speaking at IDC's annual Directions '98, a computer industry briefing in San Francisco today, Gens described the coming five-year period as a time of "harrowing change" in the IT industry, with no clear winners in sight. Customer mindshare has yet to be dominated by anyone, Gens noted.

"We are on a remarkable odyssey toward the year 2002, and like all odysseys, there will be many hard-fought battles along the way," Gens said. "We see a massive 40-fold increase in the number of Web transactions, and a four-fold increase in the number of users, by 2002. This growth, however, will come at a price to some of today's established vendors."

Among Gens' most startling predictions:

PCs will no longer be the dominant Internet access device. As early as 2001, non-PCs — information appliances, network computers, WebTV, gaming consoles, etc. — will represent nearly half of all Web access devices shipped in the U.S., up from four percent today, and nearly 80 percent of all PCs shipped in the U.S. will be priced under $1,500.

Bandwidth –seen as the key limit to Internet growth — will be widely available and competitively priced. "The future of the bandwidth crisis has been greatly exaggerated," Gens said.

New platforms will emerge. Intel Corp. will introduce a non-Pentium chip line, and Microsoft will unveil a non-Windows operating system, Gens predicted.

Megamergers and shakeups are ahead, as the Internet meets the corporate enterprise. Initially forecast in his 1998 IT industry predictions, Gens alluded to a potential acquisition of Netscape by Oracle Corporation. In today's speech, Gens predicted that Sun Microsystems will also need to strengthen itself through acquisitions in 1998.

IDC pegs the worldwide market for Web commerce at $8 billion in 1997, reaching $333 billion by 2002. The number of wired users will jump from 82 million to 329 million in the same time frame.

"This a critical time for IT vendors, requiring clear vision and bold action," Gens said. "Nearly half the large corporate users we surveyed did not know which vendor would be most critical to their Web success. Clearly, the customer mindshare battle has yet to be won. But winners will emerge within the next 36 months."

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies. IDC offers the industry's most comprehensive and rigorous Internet forecasts and analysis.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing, small business and education markets, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases and offers full-text searching of recent research.

IDC is a division of International Data Group, the world's leading IT media, research and exposition company. IDG publishes more than 285 computer magazines and newspapers and 500 book titles and offers online users the largest network of technology specific sites around the world through IDG.net (http://www.idg.net), which comprises more than 200 targeted Web sites in 52 countries. IDG is also a leading producer of 110 computer-related expositions worldwide. Company information is available at http://www.idg.com.

All product and company names may be trademarks or registered trademarks of their respective holders.