Looking Back on IDC's 2005 Predictions

By DAVID SIMS
TMCnet CRM Alert Columnist

Before January 2005, TDC Trade printed a list of ten predictions for 2005 from IDC, a global market intelligence and advisory firm for the Asia/Pacific Information and Communications Technology regional market.

"This year we predict that the IT market in Asia/Pacific (excluding Japan) will grow by 10% in 2005 to $97 billion, despite prospects of a slower economic growth relative to 2004," said Piyush Singh, Managing Director, IDC Asia/Pacific. "The total telecom services market in the region will grow by 11% to $163 billion in 2005, driven primarily by growth in IP, broadband and wireless services."

The forecasts for the Asia/Pacific excluding Japan (it even has its own acronym, APEJ) ICT markets were drawn from "IDC's latest research, and a worldwide brainstorming exercise among IDC's more than 700 analysts," according to company officials.

The top 10 predictions for the ICT Market in APEJ for 2005 were as follows:

1. IT Spending in Asia/Pacific excluding Japan (APEJ) would grow by 10% in 2005, despite slower economic growth. Total IT spending in the region will reach $97 billion in 2005, driven by a healthy 15% growth in China (excluding Hong Kong) and 22% growth in India. These two countries were supposed to account for 42% of total IT spending in APEJ in 2005

2. Wireless services market would overtake fixed-line services in APEJ. The total telecom services market in APEJ was expected to reach $163 billion in 2005, for growth of 11% over 2004: "More than half of this revenue will accrue from wireless services in 2005, marking an industry transition that began almost a decade ago," IDC wrote.

3. The semiconductor market would correct in 2005, registering a 2% dip in worldwide revenues. This correction was expected to produce an overall negative growth of 2% in 2005 with revenues reaching $205 billion.

4. Consolidation and commoditization of IT hardware infrastructure would accelerate industry realignment. "The hardware infrastructure upgrade cycle that picked up steam in 2004 will continue into 2005, though at a slower rate in revenue terms, as prices continue to decline and hardware commoditization accelerates."

5. Security would remain on top of the CIO agenda. The security software market in APEJ was expected to grow by 18.9% to $818.4 million in 2005.

6. Linux would expand within server operating environments. Linux software license revenues were forecast to grow from $6.48 million in 2004 to $11.6 million in 2005 in APEJ: "This trend will continue over the next four years, and Linux software license revenues will reach $69.8 million by 2008 at a compounded annual growth rate of 82.5%."

7. Offshore services and BPO will accelerate. IDC expects "comparatively rapid adoption of BPO in emerging markets in Asia" as local companies increasingly compete with global entities and face continual changes in regulatory dynamics.

8. Enterprise Solutions Platforms will reshape the application software business. ESPs -- IDC's term for the emerging generation of application integration platforms like SAP's NetWeaver, Oracle Information Architecture, PeopleSoft's AppConnect, Siebel's Universal Application Network -- "is moving the focus of the business applications market away from large, monolithic packages."

9. Digital home will establish a foothold in developed markets in the region. "The digital home will start becoming a reality in several countries in APEJ in 2005." IDC forecasts 69.3 million households in Asia/Pacific will have broadband Internet access by 2008, representing 9.4% of all households in the region.

10. Three emerging technologies will be on the verge in 2005. IDC predicted innovation in such areas as system packaging, virtualization, automated management, voice-over-IP, converged devices, integration platforms, and composite applications and web services: "2005 will also see the growth in the Interest and the importance of innovations at the periphery, including sensor-enhanced RFID, mesh networks and semantic Web technologies."

David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.

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