Lower Expectations in 2002 for Worldwide Corporate IT Education and Training but Future Looks Brighter, IDC Says

FRAMINGHAM, MA, APRIL 16, 2002 – The training market is not immune to the IT service spending slowdown new research from IDC reveals. In a recently published report, virtually every region in which IDC covers IT training, analysts have revised their market sizing for 2001 downward and lowered expectations for growth in 2002. However, longer-term outlooks are more positive. IDC predicts the worldwide market for Corporate IT Education and Training will increase at a compound annual growth rate (CAGR) of 11.2% to reach $39 billion by 2006.


According to IDC, software spending in North America did not grow nearly as quickly in 2001 as it did in 2000, when it increased more than 18% over 1999 spending. Over-investment, particularly in technology, by companies prior to the bubble burst has deterred growth in investment over the past 18 or so months. The result is that the IT training market, while still growing in 2001, was impacted adversely. The picture for 2002 will be anything but rosy, particularly during the first two quarters. The main factors that will affect IT demand remain related to wider economic concerns and business confidence. However, the growth of various software markets foretells revenue increases in the IT training market.

"The recent economic slowdown has caused a deceleration in the outsourced corporate training market rather than a contraction and we remain cautiously optimistic that double-digit growth in the market will soon return," says IDC senior analyst Michael Brennan. "Corporations need to maximize employee productivity to remain competitive as the economy expands once again. They will outsource to vendors whose training services and technologies address mission critical processes and skill gaps."

While not the panacea everyone had hoped, elearning continues to penetrate, and early adopters are using it more and more as time progresses. IDC believes that the market for delivering IT training content using the corporate network as a medium will grow by nearly 44% in 2002. Buyers feel that elearning is particularly suitable for technical subjects such as application training, programming, and system infrastructure training.

IDC remains optimistic about the corporate IT training marketplace, particularly over the long term. To fully take advantage of long-term global market opportunities, IDC recommends vendors strongly consider localizing their offerings when expanding overseas and emphasizing the ability of training to enhance productivity and organizational performance by linking prospects' business problems with vendor offerings.

IDC's outlook for the outsourced corporate business skills training market in the United States has also been downwardly revised. The market grew 12.5% in 2001, and it will only grow by single-digit percentage points this year. However, IDC's long-term outlook for the corporate business skills training market also remains strong.

After recovering from the recent economic contraction, IDC expects spending on outsourced corporate training will pick up more steam toward the end of 2002 or at the beginning of 2003 and resume double-digit growth through 2006. This growth will come from the need for employee productivity gains, the increasing propensity of organizations to outsource, and the increasingly robust choice of vendor offerings. IDC believes that successful vendors will be those that can blend training delivery methodologies, prove their worth to customers’ business objectives and successfully promote employee uptake.

The research in this release comes from the following two new documents produced by IDC’s corporate eLearning research service.

IDC’s report, Worldwide and U.S. Corporate IT Education and Training Services Market Forecast and Analysis, 2001-2006, (IDC #26767) examines the worldwide and U.S. corporate IT education and training markets. Its purpose is to provide the necessary data and analysis to assist vendors with their strategic business planning processes, addressing the following areas: worldwide market sizing and particular growth rates by geographic region in the global market; market sizing and particular growth rates for the U.S. IT training opportunity by content area and delivery format; survey results from buyers and sellers of IT training and elearning in the United States; pertinent trends, challenges, and opportunities for the IT training market, including an investigation of global economic climates.

IDC’s study, U.S. Business Skills Training Market Forecast and Analysis, 2001-2006 (IDC #26795) examines the outlook for the outsourced corporate business skills training market in the United States, and how vendors should position themselves for success.

To purchase these documents, visit www.idc.com or call IDC's volume sales hotline at 508-988-7988 or email jnagle@idc.com.

For additional information about IDC’s Workforce Management Services Research, please contact Jill Toole at 508-988-6915 or at jtoole@idc.com.

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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