IDC Reports on Internet Spending - International Data Corp - Industry Trend or Event

ENT, April 7, 1999

According to a report by International Data Corp. (IDC, www.idc.com), corporate Internet spending will exceed $203 billion by 2002. Spending right now is at about $85 billion in the U.S. IDC expects this growth trend to continue well into the new millennium.

The report says spending on the Internet has not been limited to any one segment of the market: Financial services will spend about $16.6 billion in 1999; manufacturing will spend about $24 billion; retail will spend about $6.2 billion and media about $10 billion.

Companies have been motivated to increase their online spending to stay competitive. With the emergence of Web-based products and services the past few years, companies have become more comfortable with e-mail and groupware. Comfort with these basic processes has prepared companies to launch larger endeavors and to embrace the Internet more fully.

All of this has led corporations to want to invest in Web-based technologies, expand operational efficiencies and make themselves more accessible to the consumer market by offering increased services and stronger sales efforts through the new medium, according to IDC.

The ultimate driver of corporate Internet spending is e-commerce - which is an opportunity for companies to target a new and growing market sector called online consumers.

For vendors who want to get the most out of their online spending, IDC recommends three efforts: Identify the big spenders; find out what those spenders want and supply it for them; and pursue joint ventures to make services and products known to different types of online consumers.