Consumers to drive computing's future, IDC says

By early in the next decade, consumers will be the force that drives the computer industry, putting now-dominant corporate users in the back seat.

By early in the next decade, consumers will be the force that drives the computer industry, putting now-dominant corporate users in the back seat, analysts said at IDC Japan's annual computer industry briefing.

Home and individual computer users, who as a whole are today just catching up with the global PC revolution, soon will bring immense buying power to bear on the computer industry, overturning several decades of corporate leadership, says Frank Gens, senior vice-president of research at International Data, IDC Japan's parent company, based in Framingham, Massachusetts.

Last year, corporate users accounted for 91% of the roughly US$514 billion spent on IT equipment worldwide, with consumer sales making up the remaining 9%, he says. That figure is at odds with the world economy in general, of which 63% is consumer spending, he says.

Dividing computing's recent history into three waves -- the back office automation of the 1970s, the front office automation that followed, and the automation of consumer households now getting under way -- Gens warns that IT equipment suppliers need to shift their focus, or they may not survive.

"The third wave of computing will be the consumer marketplace. ... It will dictate what the business computing technology and products are going to have to look like," he says. "Those who intend to succeed as suppliers of IT equipment 10 years from now have to become smarter about being able to meet the needs of the consumer market as well as the changing needs of the corporations."

In short, he says, "PC suppliers that within five years are not in the consumer market and successful in the consumer market won't be in the PC market at all".

And although today's standard PCs, based on Intel processors and the Windows operating system, are penetrating homes around the world, the winning computing platform for consumers may not be one supplied by the traditional PC players, says David Card, director new media research at New York-based IDC/Link.

"What will happen when Sony sets the rules for writing software in the consumer market and it feeds back into the corporate market?" he says. Game machines could even become the de facto consumer market platform, he says.

The pull of the consumer market will extend far beyond PCs and software, analysts say.

Companies from all sectors that are building intranets within the corporate sphere today will someday need to extend those networks to consumers by opening up portions for customers to access on their own, for purposes of customer service, sales and tracking, Gens says.

Some companies, including Wells Fargo and US West, already are folding customers into their intranets, and others are sure to follow as the extended intranet becomes necessary for reaching the mass market, Gens says.

"The intranet is a bridge, not a destination. It is a bridge to the new marketplace," he says.

And as an ever increasing number of companies cross that bridge, building a brand name becomes ever more important, he says.

"It will be harder for customers to know which suppliers are good and which are not good, so developing strong brand image will be more important in the next 10 years than it has been in the last 10 years," he says.

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