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xSP spending set to increase

Although the past 12 months has seen a reduction in IT budgets, IDC expects the spending on infrastructure by xSPs to increase at a CAGR of 13.5% between 2001 and 2006.

Although the past 12 months has seen a reduction in IT budgets, IDC expects the spending on infrastructure by xSPs to increase at a combined annual growth rate (CAGR) of 13.5% between 2001 and 2006.

The analyst house reports that, worldwide, xSP spending on infrastructure was $75.8 billion in 2001. By 2006 this will have risen to a whopping $142.8 billion.

Within the overall market, most segments are expected to retain double digits growth, however, some segments — most notably services —will undergo withdrawal through 2001 and 2002.

IDC attributes this to the “current desperate need of xSPs not to spend money on capital expenditures of all types, not only services, where they can avoid doing so.”

“Although the xSP market has had a rough ride over the last year, year and a half, xSPs are finally beginning to loosen their spending belts,” says Laurie Seymour, IDC’s program manager for xSP research.

“While suppliers to xSPs can still expect tough times through 2003, the good news is that the market is starting to grow again,” he adds.

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