Utilities Companies To Focus IT Spending on Mission-Critical Projects in 2003, IDC Research Shows

FRAMINGHAM, MA – MAY 8, 2003 – Faced with the uncertainties of market deregulation, U.S. utilities will be hesitant to launch major IT projects that require multiple updates in rapid succession to stay compliant. Nevertheless, a new research study published by IDC reveals that utilities will continue to examine IT security initiatives to ensure the safety of their operations and physical assets as well as evaluate current enterprise systems to determine their viability in competitive markets in the future.


IDC estimates that IT spending by the U.S. utilities industry was $15.4 billion in 2002, a decrease of 2.3% from 2001. IDC anticipates IT spending to increase again in the utilities industry in 2003 and reach $20 billion by 2007, with a five-year CAGR of 5.3%.

"We continue to support the assumption that utilities companies will spend on mission-critical IT projects, such as security and business continuity, in 2003," said Christopher Boone, program manager in Vertical Markets Research at IDC. "As noted, we believe that IT budgets at utilities will remain tight throughout 2003. However, an improved economy in 2004 and beyond will spur the utilities' IT spending to expand faster in the later years of our forecast."

Among the guidance IDC gives IT vendors targeting the utilities industry in its latest report are the following recommendations:· Promote security within IT offerings for utilities.

Market IT services as a way to alleviate burdened IT staff.

Present projects in manageable phases.

The IDC research document, U.S. Utilities IT Spending Forecast, 2003-2007: A First Look at the Year Ahead (IDC #29318), presents the 2003-2007 IT spending forecast for the U.S. utilities industry by the following sub-industries (and SIC codes): electric services (SIC 491); natural gas production, transmission and distribution (SIC 492); combination utilities (SIC 493); water supply (SIC 494); sanitary services (SIC 495); and, other utilities (SIC 496-497). In addition, the document includes a detailed summary of forecast assumptions and their impact. The report also offers recommendations to IT vendors that target the utilities industry to help them capitalize on emerging opportunities.

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

For more information about IDC's United States IT Opportunity: Energy/Utilities research service, please contact Virginia Lehr at 508-935-4188 or email vlehr@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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