IDC Projects IT Growth in Gov't Services & Low-End Servers
📅 - At $28.9 billion in 2001, the U.S. government IT market outsourced to external IT vendors has been one of the sturdiest sectors during the economic recession. A new study published by the noted research firm IDC (idc.com) forecasts that the market for government services will reach $42.2 billion by 2006, demonstrating a five-year compound annual growth rate (CAGR) of 7.8 per cent. These figures represent the market opportunity for external IT vendors and therefore are based on external IT spending only. Total IT spending (internal and external) would more than double these amounts.
Compared with other vertical industries in the U.S., government has a higher proportion of internal IT spending. IDC expects that this landscape will shift, though, over the next five years as the government faces a shortage of IT professionals and over half of the government workforce reaches retirement age. This shift will pose increased opportunities for work outsourced to external IT vendors.
Another recent IDC forecast also projects growth in the low-end server market. The research firm projects that the Intel server market will grow to at least $5 billion within the third quarter of 2002.
IDC expects third-quarter spending in the U.S. to increase by as much as 4.7 per cent compared to third-quarter 2001 spending. The high-tech research firm attributes the spending increase to improving market conditions for low-end servers.
Most vendors reported strong sales in July and August as well as renewed purchase interest. This marks the first indication of positive growth within the server sector within a year.
In the long term, IDC projects that the server market will achieve compound annual growth rates of 3 per cent during the next five years, representing $63.4 billion in raw revenue by 2006.
This growth will be driven by Linux hardware sales, which will triple to $6.5 billion in 2006, and Microsoft-based server platforms, which will increase by nearly $5 billion to $19 billion.
The two IDC reports, U.S. Government IT Market Forecast and Analysis, 2001-2006, and Worldwide Quarterly Server Forecast, are now available.
Compared with other vertical industries in the U.S., government has a higher proportion of internal IT spending. IDC expects that this landscape will shift, though, over the next five years as the government faces a shortage of IT professionals and over half of the government workforce reaches retirement age. This shift will pose increased opportunities for work outsourced to external IT vendors.
Another recent IDC forecast also projects growth in the low-end server market. The research firm projects that the Intel server market will grow to at least $5 billion within the third quarter of 2002.
IDC expects third-quarter spending in the U.S. to increase by as much as 4.7 per cent compared to third-quarter 2001 spending. The high-tech research firm attributes the spending increase to improving market conditions for low-end servers.
Most vendors reported strong sales in July and August as well as renewed purchase interest. This marks the first indication of positive growth within the server sector within a year.
In the long term, IDC projects that the server market will achieve compound annual growth rates of 3 per cent during the next five years, representing $63.4 billion in raw revenue by 2006.
This growth will be driven by Linux hardware sales, which will triple to $6.5 billion in 2006, and Microsoft-based server platforms, which will increase by nearly $5 billion to $19 billion.
The two IDC reports, U.S. Government IT Market Forecast and Analysis, 2001-2006, and Worldwide Quarterly Server Forecast, are now available.
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URL source: http://www.thewhir.com/marketwatch/idc101602.cfm
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