Financial Daily from THE HINDU group of publications
Friday, Jul 26, 2002
E-biz to lead rebound by 2003-04: IDC
BANGALORE, July 25
THE FUD (Fear-Uncertainty-Doubt) factor is giving way to a rebound in the IT industry sometime in 2003-04-05, according to market research agency IDC.
At its annual event Directions 2003, Mr Pradeep Gupta, Managing Director, IDC, said that after a dip, a rebound had to happen and it was already starting to. His optimism was based on the observation that the IT industry is still not "saturated".
The industry has not yet reached a stage where single digit growth was all that it could look forward to. The increase in complexity of businesses over the world, increased mobility at personal and business levels and the need for connectivity and globalisation would keep up the demand for more technology, he said.
Very specifically, he saw opportunity in the areas of business integration, mobile and wireless, new computing architecture and security. IDC research had shown that 50 per cent of Fortune 500 companies believed that a Web site was critical to their business.
Around 60 per cent companies polled said that they had installed ERP/CRM or some other enterprise application, but only 12-15 per cent had integrated them. The enterprise application services market worldwide was estimated at $300 billion by 2005.
Enterprise integration was predicted to touch around $17 billion, while Web services would be $75 billion by 2005. This is an area where Indian software companies in particular can step in, he said.
The mobile and wireless business is also set to grow. The number of users is expected to increase five fold and more applications would need to be written. New architecture is one other opportunity, Mr Gupta said.
For instance, Intel had "hit a wall" because applications had not kept pace with the power of its chips. Software and services for security and business continuity systems is a high priority area, especially after September 11.
On the job front too, there is a corresponding positive outlook with strong requirements predicted in 2003 and 04.
After every dip, the rebound that happens is accompanied by the emergence of a "new leadership", he said. Companies that look at new business models and new ways of doing things and which are not "stuck in the past" had a good chance of success, he said.
E-business would be at the heart of the rebound, said Mr Dane Anderson, Vice-President of IDC. Despite the current negativity around e-business, growth would be driven from areas such as enterprise application services, Web services, EIP and knowledge management, he said.
The economy itself is moving from industrial economy to knowledge economy, he said. According to him, three fourths of a company's assets were knowledge based in the form of copyrights, customer data, corporate values and so on.
Though the study was international, the broad parameters would apply equally to India, according to IDC. Asked if the bad monsoon could affect the industry, Mr Gupta said that it might. However, 50 per cent of the revenues still come from exports, he observed.
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