Is the IT industry set for a Happy New Year?

IDC suggests that IT spending will pick up in 2003 and certain areas will boom. However, the drought is not over yet and some areas, such as 64-bit computing, will continue to struggle.

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By  Matthew Southwell Published  December 24, 2002

After languishing in the doldrums for what seems like an age, the IT sector should pick up during 2003 according to IDC. Worldwide spending on information technology and telecommunications is slated to hit US$1.9 trillion in 2003 and technologies such as Linux, wireless local area networks (WLANs) and messaging look most likely to benefit from this growth.

“We expect to see a return to spending growth in 2003 in both the IT and telecommunications sectors,” says John Gantz, chief research officer at IDC. “Hardware spending and wireless services will benefit the most from increased spending over the near term,” he adds.

The analyst house is also forecasting that the mid-range server market will return to positive growth, following two years of decline, and that, by the end of 2003, digital images captured per day by scanners, cameras, and devices will surpass the number of images captured on film.

Other significant milestones to be passed over the course of the next 12 months include the installation of more than 600 million PCs and 1.5 billion cellular phones worldwide, the passing of 700 for the number of internet users worldwide and the creation of more than one billion email boxes by the end of 2003.

However, it is not all good news for the industry, as IDC is also predicting that the adoption of 64-bit computing will be slow, and vendor-driven. Furthermore, it does not expect to see full 64-bit use in commercial applications until later in the decade.

Other areas of concern for the analyst house include the growth of cyber-terrorism should there be war in Iraq, and the fact that project-based IT services will be flat or down again in 2003 as companies focus on smaller, short-term projects and managed services.

“IT consulting will continue to languish,” says Gantz. “Moreover, IDC expects overall technology spending growth to remain in the single digits for the foreseeable future. This is a significant departure from the double digit growth characterizing much of the last decade and will force technology providers to rethink their market strategies.”

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