Purchases of Web-Related Technology Are Now a Business Imperative, IDC Says

FRAMINGHAM, MA – AUGUST 14, 2000 – During the past year, U.S. businesses have significantly changed their Web-spending patterns. Gone are the days of Web spending to build an Internet presence, and in their place is spending to integrate the Internet into internal and external business processes. In other words, purchases of Web-related technology are now a business imperative, according to IDC.


"Today, corporate Internet spending is an investment that directly impacts the strategic direction of organizations," said Anna Giraldo Kerr, research manager for IDC's Internet and eCommerce Strategies program. "The strategic impact remains, but it has shifted from reducing costs to the transformation of business models."

While the reason for Web spending is evolving, the amounts expended for IT hardware, software, and services will remain high. IDC expects Web spending on IT products and services to more than double from $119.1 billion in 2000 to $282.5 billion in 2003.

This year, for the first time, U.S. businesses will spend more on Web- related IT services than hardware, and the services category will represent the largest opportunity throughout IDC's forecast. Nevertheless, the importance of hardware should not be underestimated.

"Hardware vendors play a critical role in the ebusiness supply chain. Their products enable the interface and access of Web technologies," Kerr said. "Although it may appear that Internet-related hardware is at the bottom of the food chain, without it there would be no Internet activity." Internet access and Web hosting will contribute to growth in the services space.

Spending on software will grow faster than any other type of Web IT spending. Web software-related spending will increase at a compound annual growth rate of 43% from 1999 to 2003, compared with a CAGR of 35% for the overall market. Despite the high growth, software will remain the smallest part of the market.

Information like the above can be found in IDC's new report IDC's 2000 U.S. Web Spending Model, Version 2.3: Forecast and Analysis by IT Segment (IDC #B22495). The report details the change in Web spending and reviews factors enhancing and inhibiting growth. It also forecasts Web spending segmented by hardware, software, and services through 2003 and discusses opportunities and trends impacting each area. To purchase the report, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

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 500 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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