www.idc.com state of the market it spending directions 2004-2008 stephen minton vice president idc...
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www.idc.com
State of the MarketIT Spending Directions 2004-2008
Stephen MintonVice President
IDC Worldwide IT Markets
State of the MarketState of the Market
• Recovery remains on course according to previous conservative expectations
• Business leaders remain cautious; spending focused on infrastructure upgrades, some new projects
• Wild cards : Oil, Global Economy, Exchange Rates
• Tax incentives could spur US demand in Q4; but impact likely outweighed by other factors
• Hot CIO focus areas : Infrastructure, Security, CRM, WLAN, Business Intelligence
• New shift to “Dynamic IT” adoption and utilization
Worldwide IT Spending GrowthWorldwide IT Spending Growth
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Actual
Forecast
% Growth
Source: IDC Black Book Q3 2004
IT Spending Growth by RegionIT Spending Growth by Region
0% 2% 4% 6% 8% 10%
US
Europe
Japan
AP
2006
2005
2004
Source: IDC Black Book Preliminary Q3 2004
Market Growth Forecasts, Q3 2004Market Growth Forecasts, Q3 2004Worldwide IT Spending Growth, 2004-2008 (%)
2004 2005 2006 2007 2008HardwarePersonal Computers & Workstations 3% 4% 3% 3% 4%Servers 2% 4% 2% 4% 3%Printers & Other Add-Ons 5% 5% 4% 3% 3%Smart Handheld Devices 42% 42% 36% 33% 27%Storage 4% 5% 5% 3% 3%Network Equipment 7% 9% 12% 12% 12%Total Hardware 5% 6% 6% 6% 6%
SoftwareApplications 6% 7% 7% 7% 7%Application Development 5% 6% 7% 7% 6%System Infrastructure 7% 7% 8% 7% 7%Total Software 6% 7% 7% 7% 7%
ServicesPlanning 4% 6% 6% 7% 7%Implementation 4% 5% 6% 6% 6%Support 5% 6% 6% 7% 6%Operations 8% 8% 8% 7% 7%Training 2% 3% 6% 7% 6%Total Services 5% 6% 6% 7% 7%
Total IT 5% 6% 6% 7% 7%Source : IDC, September 2004
Source: IDC Black Book Q3 2004
Likelihood of IT Budget IncreasesLikelihood of IT Budget Increases
Source: IDC Market Watch Index, Q3 2003 – Q3 2004
0
10
20
30
40
50
60
Q3 03 Q4 03 Q1 04 Q2 04 Q3 04
Positive
Negative
Drivers for Increased IT SpendingDrivers for Increased IT Spending
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Economy
IT improvements
Falling costs
Competitors spending
Customer demand
Innovation
Infrastructure upgrades
Regulatory
Security
Source: IDC Market Watch Survey Q3 2004
Security13%
Regulatory4%
Cost-cutting15%
Infrastructure27%
New software 25%
Integration4%
Internet12%
Main Focus for IT DepartmentMain Focus for IT Department
Source: IDC Market Watch Survey Q3 2004
Yesterday’s NetworkYesterday’s Network
Today’s NetworkToday’s Network
Tomorrow’s NetworkTomorrow’s Network
Complexity of systems/architecturesComplexity of systems/architectures
End-users start asking difficult questionsEnd-users start asking difficult questions
IT Doesn’t MatterNicholas CarrHarvard Business ReviewMay 2003
Enterprises have always been Dynamic…Enterprises have always been Dynamic…
Dynamic IT Capability
Human CapitalCustomer Care
Store/Branch OpsPerformance Management
Sales & Marketing
Supply Chain
Innovation/PLM
Production
Dynamic Enterprises Needs Dynamic ITDynamic Enterprises Needs Dynamic IT
Dynamic IT Capability
Human CapitalCustomer Care
Store/Branch OpsPerformance Management
Sales & Marketing
Supply Chain
Innovation/PLM
Production
Where to Start? – Business Execs’ Priorities for Dynamic ITWhere to Start? – Business Execs’ Priorities for Dynamic IT
Source: IDC’s LOB ExecutiveSurvey, June 2004
Q: Most important IT improvements to better support business?
¥£€$
Two focus areas for Dynamic IT transformationTwo focus areas for Dynamic IT transformation
Business Strategy Automation & Execution
Responsiveness to Market
IT Operations Automation & Management
Operational Efficiency
End-to-End, Dynamic Management
Business Monitoring & Analytics
Business Process & Application Automation
Information and Data Services
Integration, Event & Deployment Services
Collaboration & Communication Services
Access & Interface Services
Service Level Management & Automation
Metering, Measurement & Charge-back
Security
Infrastructure Virtualization
Infrastructure Provisioning
Resource Management & Monitoring
Platform Management & Monitoring
Piecing Together the Big PicturePiecing Together the Big Picture
Business leaders are still nervous — must play to cost-conscious market with appropriate message
IT spending growth will continue to recover with overall economy and business investment, but users are focused on key priorities / dynamic IT
IT spending will be evaluated throughout the year, wild card factors could disrupt outlook