COPENHAGEN, June 14, 2002 - The Western European utility market in early 2002 is a copy of the telecommunications market in the early 1990s. The market is gradually opening up to deregulation, removing old utility monopolies and creating conditions for competitive markets to emerge. To compete successfully in the deregulated and increasingly competitive Western European marketplace, IDC believes new and recently privatized companies offering utility services are looking at innovative ways to attract and retain customers.
"Utilities must realize that price is not the only factor for customers when choosing a service provider and that customer satisfaction and loyalty stem from excellent customer service," said Lars Schwaner, research analyst with IDC's European Software Group.
The utility sector has traditionally lagged behind other industries in the advanced use of IT; however, this picture is currently changing. Today, software is the fastest growing IT segment for utilities. Investments are driven by the implementation of advanced applications covering the whole value chain of utilities: generation, transmission, and distribution. The Western European market for telecom and utility applications is expected to reach $408 million by 2006 - up from $258 million in 2001.
The trends that are shaping the landscape of the Western European utility market are also strongly impacting the IT players in this industry. The major trends are connected to the ongoing deregulation process across the whole region and to the concurrent fragmentation of the value chain with the separation of the generation, transmission and distribution processes, in terms of:
· Deregulation
· Global consolidation
· Specialization
· Diversification of service offerings
· Outsourcing of non-core processes
· Power price reduction
The direct consequence of efforts aimed at diversification in the utility sector is the emergence of multi-utilities - that is companies offering comprehensive and integrated value-added offerings, encompassing the supply of electricity, gas and water, fixed and mobile telephone, Internet services, call center facilities, billing, maintenance services, etc. "As utility companies supply products that are highly commoditized, a key competitive and differentiating factor is customer service delivered both through traditional channels and online," Lars Schwaner concluded.
The document Utilities - The Impact of European Deregulation on the Sector (IDC#LS24J) is an introduction to IDC's theme about utilities and telecom applications. It focuses on the trends characterizing the Western European market for utilities and its impact on independent software vendors.
To purchase this document, call your local IDC office or visit us at www.idc.com.
About IDC
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:
Lars Schwaner
+45 39 16 22 31
lschwaner@idc.com