IT direction positive: analyst

Don't panic about the dot-com crash; we've seen it all before and the IT industry will bounce back.

That was a theme at the IDC Directions conference in Auckland last week.

IDC New Zealand's head, Dinesh Kumar, says New Zealand and the Asia Pacific is "sheltered" from the turmoils of the US.

Local IT firms still enjoy growth, including the country's biggest - EDS lifted sales 52.8% in the past year to $405 million, Compaq grew 12.3% to $292 million and Datacom grew 11% to $160 million. IBM has declining sales in New Zealand but still makes a profit of $15 to $16 million a year, he says.

Kumar says the IT industry has crashed before and recovered. "We thrived in the aftermath and we will thrive again. The current dot-com crash is no big deal. It's only a minor correction on the way to ongoing prosperity."

IDC expects the US web and internet commerce market will reach $US6 trillion by 2015. E-business will boom as business website numbers increase from 10 million in 2000 to 23 million in 2004. This will create a $US36 billion market for networked infrastructure management services, with the web hosting market growing to US$85 billion in 2004. "We will also renovate existing websites and increase their functionality," Kumar says.

IDC expects spending on them will increase five- to tenfold per site, creating a worldwide $US24 billion market in e-commerce software and $US47 billion market in supply chain automation by 2004. Existing websites will also be rewired and integrated, creating a $US30 billion market in integration services and $US13 in integration software by 2004, again five times their current size.

In New Zealand, net users will increase from 1.4 million in 2000 to 2.5 million in 2004, when a third of people will buy over the web, creating a $4.4 billion B2C market, an eight-fold increase on 2000.

Companies here will also see the IT spend grow annually by 5% over the next five years, reaching $5.7 billion by 2005.

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