Edge: Work-Group Computing Report

Work-Group Computing Report: New Global IT Forecast: Services, Software Lead $3 Trillion Market in 2004

New Global IT Forecast: Services, Software Lead $3 Trillion Market in 2004 – Industry Trend or Event

Silicon Valley Consultants Predict Total Annual Spending for IT to Increase by $1.1 Trillion; See Big High Tech Opportunities Ahead Following Asian Crisis and Y2K Adjustments A new report issued jointly by two Silicon Valley consulting firms with more than 20 years experience successfully forecasting and analyzing foreign economies and technology markets predicts aggressive growth for information technology (IT) companies through the year 2004. The report, a product of Strategic Planning Services (SPS) and Spectrum Economics of Palo Alto, Calif., foresees that global IT spending by corporations and governments will grow from $1.9 trillion in 1999 to $3 trillion in 2004. Category leaders will be high tech services and software products, which SPS/Spectrum Economics say will grow to 42 percent of total worldwide IT budgets by 2004. With forecasts delineated by country and region, the “Global Economic and Information Technology Market Forecasts – 1999-2004” report also provides analyses of opportunities and risks based on economic and technology indicators, assesses the impact of electronic commerce and the Internet, and identifies major IT product and services vendors. “Even in a period of economic turbulence and seemingly negative technology events like the `millennium bug,’ opportunity abounds for visionary technology companies that can demonstrate business value,” said Richard Carlson, chairman of Spectrum Electronics. “Companies have no choice but to invest aggressively in the communications and technology infrastructures that maintain and grow their businesses, or risk losing market share to more forward-thinking competitors who are expanding geographically.” The report predicts that growth in information services and software spending from 1999 to 2004 will average 15 percent per annum, with services and software product spending doubling from $625 billion to $1.25 trillion. The report also assesses the impact of: * The “Great Asian Depression” * Latin America’s financial crises in Brazil and Venezuela * The collapse of the Russian ruble and the new Soviet-style government * U.S. stock market corrections and the impact of foreign turmoil on U.S. business * The new Euro currency Choosing the right market for high tech companies to enter and develop over the next five years will be tricky business for global companies. “The best bet is to cherry pick market entry based on economic and financial indicators,” Carlson said. “For example, South Korea’s recent collapse, although dramatic, has forced reforms that are being implemented faster than in many other countries. As a result, its economy will recover much more quickly than those of Japan, Indonesia or Malaysia. Lawson Software, a $238 million provider of enterprise software applications has retained the services of SPS to guide the company’s aggressive global expansion – from approximately 10 percent of the company’s revenue in 1998 to 25 percent by the end of fiscal year 2002. “We view the contents of this report and SPS consultants as important input to our global growth strategy,” said Richard Lawson, president and chief operating officer of Lawson Software. “We agree with Spectrum and SPS that opportunities abound for enterprise applications companies in select markets.” The new report includes purchasing forecasts for computer equipment, computer maintenance, data communications, and software and IT services for 32 countries, five regions and globally. Purchase information and additional details on the report are available from Spectrum’s website or by calling 650/324-270l.

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