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Still a good ride for IT

Look to a solid half-decade ahead for worldwide information technology spending. That's what IDC tells us to do in a new study it has released. In fact, the analysts say that annual spending around the globe will top $1.48 trillion in 2010, up from its current $1.16 trillion, a combined annual growth rate (CAGR) of 6.4 percent, according to IDC's Worldwide Vertical Market report.

The study is a combined effort of a team of researchers who watch IT spending and opportunities across the regions where IDC maintains a research presence. The report breaks out the regional subsets as follows: Asia/Pacific (developing and mature), Western Europe, North America, and the rest of the world. The report emphasizes the importance of the regional nature of the growth and opportunities.

Vertical market program manager Anne Lu says that vendors must keep a keen eye on specific industry and regional trends and then segment their customers (and potential customers) accordingly. If they do so with intelligent reflection, the result will be customers who get served strategically by vendors who can reap significant profits. Gone are the days when older technology can simply be reintroduced in a less developed part of the world. Customers in other parts of the world have unique challenges that will require unique solutions. That approach seems to make sense, and I'm sure IDC would be more than willing to perform the regional analysis it recommends.

The report itself is pretty pricey—$15,000—and we here at KMWorld weren't given a review copy, but sharing some of the key findings may pique your interest enough to spring for one. (In the past, we have received review copies, and although 15 grand incites no small degree of sticker shock, IDC's work is thorough and very well researched.) Lu and her team, which includes a solid group of experts in both different regions and different markets, found that software spending will see a five-year CAGR of 7.7 percent to a high of $327 billion worldwide, with the largest markets being discrete manufacturing, the services industry and government. They predict, as well, that the fastest growing areas will be healthcare, communications and government.

From a hardware standpoint, IDC anticipates a five-year recovery period from 2006 to 2010, when it will hit $562 billion. Spending will increase for volume servers, peripherals, storage and networking equipment across all regions, driven primarily by spending in the home business, consumer, communications and government sectors. Worldwide IT services, another important sector to KMWorld readers, will see spending hit $587 billion in 2010 with a five-year CAGR of 5.8 percent, with strongest opportunities in discrete manufacturing, government and banking.

So, there's every reason to believe the next five years will again be strong ones for information technology as long as the "industry" continues to practice what it preaches and ensures that it has easy access to the right information at the right time so it can make the right decisions. Clarification: Space constraints prohibited us from adding an important caveat to Jonathan Spira's article on page 1 of the January issue about the newly amended Federal Rules of Civil Procedure (FRCP) concerning electronically stored information, which took effect in all federal courts on Dec. 1, 2006. We should have included this concluding sentence: This general overview is not meant as a substitute for the advice of a qualified attorney; only an attorney can provide you with the legal advice you need to ensure that you are complying with the new rules. We regret any confusion this may have caused. 

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