COPENHAGEN, October 24, 2002 - IDC expects that over the coming five years, the knowledge management (KM) software and services market will exhibit strong growth as more companies begin to understand how to apply KM practices for the improvement of enterprise value. As a consequence, the Western European knowledge management market is expected to reach $4.2 billion by 2006, representing growth of 24% from 2001 to 2006. Across the software and services markets, the KM sectors where IDC expects the highest growth rates are KM access software (including intellectual capital management and enterprise information
portals) and training and outsourcing services.
"The fundamental reasons for adopting KM have not disappeared. Retention of expertise of key personnel and improved interaction between technology, people and processes continue to drive investments in a variety of software and services to support KM initiatives," said Sheila McGovern-Proud, Research Manager with IDC's European Services Research Group.
Important market drivers in the European KM area are major organizational changes such as a merger or acquisition, the implementation of CRM, regulatory changes to an industry such as utility deregulation and ebusiness.
There has not been the same level of hype in the KM market in 2002 compared to a few years ago. The whole IT market in 2001 and 2002 has been characterized by stagnancy and cautious spending. This is mainly due to the fact that many companies over-invested in technology during the dot-com boom and are now tightening the belt on IT spending. KM is a particularly vulnerable market because the ROI is more difficult to demonstrate and there is often no business case for it. "IDC is however not seeing a major slowdown in demand, but rather a more targeted approach to how money is being spent," Sheila McGovern-Proud continued.
"The desire to capture expertise that may include communities of practice is an important driver of KM. This means that when an individual employee leaves, all the expertise does not leave with them. It also helps companies to get new employees up to speed more quickly, creating a positive working environment," continued Nathaniel Martinez, Program Manager with IDC's European Software Research Group.
"A general definition of KM has been 'getting the right information to the right people at the right time' in order for them to make better decisions. And although the definition is too simplistic in that it does not address the importance of the KM process in developing an effective program, it is a correct explanation," Sheila McGovern-Proud concluded.
The IDC study European Knowledge Management Market Forecast and Analysis, 2002-2006 (IDC#KG03J) examines the Western European knowledge management market from 2001-2006, both from a technology and a services point of view. It provides insight for software and service vendors into the European knowledge management market. Market trends and revenue forecasts are presented by country, activity, and software type.This document is available on www.idc.com or from your local IDC office.
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IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.
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For more information, contact:
Nathaniel Martinez
+44 20 8987 7184
nmartinez@idc.com