Nine remaining vertical markets

Computer Industry Report, March 27, 1992

Analysis of the data within each of the 11 IDC vertical market segments produced an enormous volume of results. In order to present a comprehensive overview of the total market by vertical segment, following is a brief rundown of the results from each category.

Insurance/Other Financial

Some of the specific industries included in this category were hard hit by the recession (real estate and nondepository credit institutions), some were relatively if not completely insulated (life insurance), while others had a roller coaster ride (security and commodity brokers and dealers).

To further complicate generalizations, it includes both industries still known for their exceptional commitment to IBM and mainframes, and others that have been increasingly focused on distributed computing on workstations.

* Overall, the insurance/other financial sector

was an average performer in 1991, although

it expects to do somewhat better in 1992. This

is significant because the average site budget

is the second highest in the survey base, at

around $3 million. * Insurance/other financial had the highest proportion

(14.0%, compared to an average of 8.5%)

willing to buck the trend towards downsizing by

moving applications prototyped on distributed

systems onto larger, centralized host resources. * Insurance/other financial reported the lowest

percentage pursuing or considering a Unix-oriented

strategy (20%), and is second only to banking

in its disbelief in the proposition that Unix

workstations are becoming a realistic option in

place of PCs.

Industrial Equipment Manufacturing

The competitive pressures on U.S. manufacturing were exacerbated in 1991 by the performance of two components of the industrial equipment manufacturing group, the automotive and computer industries. However, the obsession with quality (read: foreign, typically Japanese competition) often leads to a countervailing plus for IS in this sector.

* As far as IS budgets are concerned, 1991 found

industrial equipment manufacturing slightly

below the average, and 1992 is expected to follow

suit.

* Industrial equipment manufacturing registered

the highest proportion (44%, compared to 30%

overall) currently pursuing a Unix-oriented strategy.

* Industrial equipment manufacturing had, at 15.0%

compared to an average of 6.5%, marginally the

highest proportion of workstations in its mix of

single-user systems (compared to IBM-compatible

PCs, Macintoshes, etc.), while a comparatively

high 18.0% expect to change the mix in favor of

workstations.

* Industrial equipment manufacturing leads in the

relative extent and degree of penetration of 11 new

products and services. Workstations, EDI, and

CASE have a particularly strong appeal.

Other Durable Manufacturing

The industries in this sector, including chemicals, plastics, and refining, were less affected by the recession, although the oil industry had its own problems in the first quarter of 1991.

* Budgets in other durable manufacturing did better

than industrial equipment manufacturing in

1991, with the survey base indicating 7% growth

last year. Unfortunately, the sector does not anticipate

maintaining this above-average pace in 1992.

* A survey-high 47% (compared to 38% overall) of

the other durable manufacturing base stated that

they were essentially saturated with PCs and

workstations and were now in an upgrade or

replacement mode.

Nondurable Manufacturing

Although many industries in this sector, which includes food and tobacco processing, textiles, apparel, and furniture, have seen growth rates fall from the 1980s, they apparently did not have a sharp short-run downturn due to the recession. However, belt-tightening is also obvious here.

* Nondurable manufacturing reported a relatively

exuberant 9% IS budget growth in 1991. Nonetheless,

it is one of two industry groupings expecting

budgets to be flat to down in 1992.

* EDI, workstations, CASE, and object-oriented

technology are the most attractive new products

and services for nondurable manufacturing.

* In the 44% of the nondurable manufacturing base

pursuing an open systems strategy (somewhat

below the average of 50%), a survey-high 59% are

implementing it through a standardized operating

system (the other choices were an enterprise-wide

communications system and common development

tools, languages, and database software).

Nevertheless, the proportion pursuing a

Unix-oriented strategy was below average.

Business Services

About all that some of the services in this sector share is classification within the 73 SIC code. Some are particularly exposed to economic hard times (advertising, consumer credit, employment agencies, etc.). Others are in relatively good shape, including participants in the two U.S. IT markets with double-digit growth, computer software and professional services. The presence of professional and processing services is important to bear in mind when evaluating some of the results.

* Business services was overall an average performer

in 1991 IS budget growth, and expects to

be the same in 1992.

* Business services styles itself leading edge in its