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Little News Is Not Very Good News

1/12/03

Research house IDC has released a study indicating that worldwide IT spending will rise by a rather modest six percent in 2003. But even these increases are restricted to certain vertical market segments, and the IDS study comes on the heels of a much gloomier forecast by Goldman Sachs for negative growth of one percent.

The favored IDC sectors are comprised of what has become the usual suspects: financial services, retail and government. The drivers of demand in these sectors are improved customer service (CRM) applications (here, here!), in-store systems and defense/security. Seen as continuing their decline are media and communications IT spending.

IDS forecasts 2003 IT spending by industry as follows:

Retail/Wholesale $85.5B
Process Manufacturing $70B
Communications $62B
Business Services $61B
Insurance $38B
Other Financial Services $32B
Education $32B
Health $27B
Utilities $27B
Transport $24B
Agriculture, Construction & Mining $22B


IDC says that the reasons for continued IT spending sluggishness are the weak economy and the lack of "new killer applications".

Our take is " deal with it". While we agree that the depressed and uncertain economy is a factor, we wouldn't pin much hope on the next killer app, if there is one. More realistic would be focusing on finding ways to reduce IT buyer risk by more quickly delivering applications that work for less.


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