U.S. IT Spending Will Increase to $416 Billion in 2005 and Reach $497 Billion by 2008, IDC Reveals

FRAMINGHAM, MA – APRIL 14, 2005 – U.S. IT spending will increase to $417 billion in 2005 and reach $497 billion by 2008, a new report published by IDC reveals. According to this new study, government, manufacturing, and banking continue to drive IT spending in process management and content management.

According to Anne Songtao Lu, program manager for IDC's Worldwide Vertical Markets research service, the consumer/home vertical has become increasingly important for IT vendors. "We expect the share of this vertical's spending on software to increase from 10.5% in 2004 to 13.5% in 2008," said Ms. Lu. "Its share of spending in the personal computers and peripherals and storage markets is expected to reach 35% and 29%, respectively, driven mainly by the proliferation of wireless and digital technologies."

Among the key findings presented in this study are the following:

— Driven by compliance and increasing data transfers, the need for content management is looming in industries such as healthcare, banking, insurance, media, and government.

— eCommerce is emerging across vertical markets.

— Mobility has become a must-have function for IT technology. IDC sees this trend in the manufacturing, banking, healthcare, and education markets.

— Creating consistent technology platforms across the board is gaining momentum in manufacturing and capital markets.

— Reducing cost is still a top business strategy. Industries use different ways to reduce cost. The fourth quarter of 2004 saw a lot of IS outsourcing deals within manufacturing, healthcare, government, and communications, suggesting companies are still in the cost-control mood.

IDC believes that vendors should position themselves to provide consistent and simplified solutions for end users and should supply solutions to increase process capabilities, especially for banking and capital markets, where their business relies heavily on the speed and accuracy of processing capabilities. In addition, the selling points of vendors should focus on effectiveness, efficiency, and the ability to close the gap between different business functions.

This IDC study, U.S. IT Spending by Vertical Market 2005-2008 Forecast: 4Q04 Update (IDC #33130) presents an updated forecast (2005-2008) compiled in the fourth quarter of 2004 for U.S. information technology spending. The study forecasts the best IT opportunities among vertical markets in 2005 and the best IT opportunities by vertical market out to 2008. It also analyzes the vertical market trends and landscape, as well as IDC's predictions and assumptions relating to market forces affecting the IT investment among 17 vertical markets in the United States. In addition, this document offers recommendations to IT vendors about how to capitalize on vertical market opportunities.

To purchase this document, call IDC's Sales hotline at 508-988-7988 or email sales@idc.com.

For additional information about IDC's Vertical Research Group, call Virginia Lehr at 508-935-4188 or email vlehr@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

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