MILAN, Italy, July 25, 2002 -Despite a sluggish 2002, IT spending in the Western European transport and utilities sectors will begin a gradual rebound in 2003, with IT investments in transport and utilities rising by 9% and 9.2%, respectively, between 2001 and 2006.
IT services will attract the largest part of the forecast spending by transport companies, growing from $2,714 million in 2001 to $4,336 million in 2006. "The necessity for transport organizations to remain competitive in the current economic scenario is driving the adoption of IT system management models that are based on outsourcing in order to improve efficiency and reduce related internal costs," said Claudia Lonardi, Senior Research Analyst with IDC's European Vertical Markets group.
European utilities' IT investments reached an estimated $5,152 million in 2001 and they are forecast to grow to $8,011 million by the end of 2006. Utilities will allocate their IT budgets mainly on the acquisition of IT services including consulting, project design and management, implementation and IT system management outsourcing.
Within the Western European transportation industry, air transport is the most advanced segment in the adoption of advanced IT solutions but it is also the sector that has been most impacted by the recent economic slowdown and the post September 11 crisis. The drop in activity that airlines, especially flag carriers, have experienced especially in the second part of 2001 is reflected in a more cautious attitude towards IT spending, at least until the end of 2002. Starting from 2003, investments in IT are expected to start picking up again.
In the Western European utility sector, generally unaffected by the economic slowdown, the gradual opening up of the electricity and gas markets to competition has translated into the need, for both existing and new utility suppliers, to increase revenue, keep costs under control and deliver high levels of customer care. Market liberalization is the major driver for IT adoption as advanced solutions are deployed by utilities to streamline internal processes and open new contact and sales channels with customers.
The electricity sector generates the biggest investments in IT compared to gas and water. IT spending by European electricity companies is estimated to have reached $3,641 million in 2001 and is forecast to increase to $5,769 by 2006 driven by the increasing level of market liberalization (five countries in the EU have already opened up 100% of their electricity markets).
IT Spending in Western European Transport and Utilities Sectors, Forecast and Analysis Update, 2001-2006 (IDC #PT01J) offers an up-to-date overview of IT spending trends and forecasts in the European infrastructure industries. Starting from trends affecting IT demand in the European transport and utilities markets, the report explores major drivers and trends in IT adoption. On the quantitative side, the focus is on spending in hardware, packaged software and IT services for the major European countries. Forecast data is split for the following subsegments: transport (air, land and water transport) and utilities (electricity, gas and water). This report is available to purchase from your local IDC office.
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For more information, contact:
Claudia Lonardi
+44 20 8987 7225
clonardi@idc.com
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