Scottsdale, AZ — U.S. companies of all sizes are expected to invest heavily in their Internet infrastructure in the coming years, according to Cahners In-Stat Group ( http://www.instat.com/ ). The high-tech market research firm suggests that the Internet-specific investments of US businesses are to account for nearly 26% of their total IT spending in 2004, up from just 15% in 2000. The biggest opportunities for technology providers will likely prove to be the “corporate market” or large and mid-sized businesses, which are expected to boost their spending on Internet technology and services from $49 billion in 2000 to $110 billion by 2004. However, vendors targeting the small and SOHO business markets will also enjoy strong growth, as these businesses are expected to increase Internet-specific spending from $31 billion to $87 billion during that time.
“US Businesses of all sizes began seriously considering the Web to enhance their business models about 18 months ago. Moving into 2001, the majority of firms are just now likely to realize some of the potential the Internet can offer them. How this happens will depend on the market,” says Kneko Burney, Director of eBusiness Infrastructure & Services at In-Stat. “Larger firms see the Internet as a cost-effective means to improve communication across groups: employees, the supply chain, customers, etc. and are likely to improve the intelligence and robustness of this communication. In contrast, smaller firms are still defining themselves online. Given this, their focus will likely be to simply build a relevant point of presence on the Web and use it effectively,” she says.
In the corporate market, businesses are expected to focus on using the Internet to streamline their operations, namely connect remote employees and eventually enhance supply chain relations, likely using the portal/intelligent interface technologies. About 50% of large companies and 44% of mid-sized firms indicated using the Internet to communicate in some way across a supplier/buyer network in 2000, In-Stat found. Small companies, especially firms with fewer than five full-time employees, are still testing the waters online and will need some time and guidance before they really integrate the Web into their day-to-day business processes. However, a growing number of easy-to-use Internet services suggest these segments’ transition online will be fairly smooth and possibly happen in just a couple of years or less.
In-Stat also found:
∑ Large companies (1,000 plus employees) accounted for 48% of business Internet technology spending in 2000
∑ From 2000-2005, large and medium-sized companies are expected to boost their spending on Internet technology by an average of 25% annually
∑ In the small and SOHO markets, firms are unlikely to keep their Internet infrastructures in-house as more easy-to-use, affordable services become available
The reports, “All Business is eBusiness: Demand for Internet Infrastructure and the Build-up of Commerce Capabilities in the Middle & Enterprise Markets; and in the Small and SOHO Business Markets” (#EC0008MS and #EC0007MS) include analysis of Internet technology and services spending by U.S. businesses with forecasts through 2004. The reports also contain corporate Internet demographic data, analysis of Internet commerce infrastructures, e-commerce applications and Web site functionality. To purchase these reports, or for more information, please visit http://www.instat.com/catalog/cat-ec.htm or contact Chris Kissel at 480.609.4531; [email protected]
Cahners In-Stat Group ( http://www.instat.com/ ) covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions.