IT Spending set to jump five per cent

The IT budgets of US companies in the manufacturing and services industries will increase in 2001 by an estimated five per cent, according to AMR Research. While other industry luminaries believe that spending will level off or decline, the results of the AMR's surveys indicate that IT budgets will increase and application spending will show growth specifically in supplier- and customer- facing e-commerce applications.

Companies are investing in applications that will help them successfully reach customers, track sales, and support accounts. IT budgets are increasing in all areas to keep pace with market demands, to ensure customer satisfaction and to help control costs.

The main business drivers for enterprise application spending are centred on the customer, the competition and the bottom line, AMR found. Application spending is keeping pace with the opportunities emerging in generating revenue, application budgets are becoming increasingly important in a company's overall planning budget.

New breed of communications service takes offInternet communication services will become a new class of Internet business that is poised to accelerate the development of remote human communication, according to Keenan Vision, a US Internet analyst firm. Keenan analysts said Internet communication services is an opportunity being served by start-up Internet businesses and existing wireless businesses that will generate $US44 billion in new sales by 2004.

Internet communication services use Web browsers, telephones, and wireless devices to help people communicate with real time audio, live video, multimedia presentations, and shared computer programs. There are a variety of Internet communication services companies that use a range of architectures, ranging from a peer-to-peer design, to a client-server design, and beyond to the information switch design, which supports the greatest level of performance and expansion through the use of a distributed architecture.

Broadband access will boost online consumer spendAccording to the Gartner Group, by 2005 consumers will spend 20 times more on the Internet when using a high-speed broadband connection than they do with traditional analog dial-up modems. The company identified a variety of factors that will contribute to the broadband multiplier effect, including:

Convenience - broadband delivers an "always on" state to the PC, giving shoppers immediate access;Quicker response time - Internet purchasers will experience less frustration and time spent waiting;User-friendly interfaces are easier for consumers to use but require greater bandwidth;Customised experience for users enabled by greater bandwidth;Time spent online is greater for broadband users compared to analog modem users.

By 2004, 29 million US households will be broadband-enabled, Gartner believes. This, combined with a penetration rate of overall Internet access of 75 per cent by 2005, will result in enormous purchasing power.

But entertainment, broadband flop on NetConsumers see the Internet primarily as a business tool for getting things done rather than a place to spend their leisure time, according to survey results released recently by PricewaterhoueCoopers (PwC). Few consumers are adopting the broadband technologies that might make entertainment online more attractive, PwC found.

The survey of 2500 consumers in the United States, United Kingdom, Germany, France and Australia showed that the percentage of consumers going online primarily for entertainment averaged four per cent. The figure was considerably less than that in Australia, and rather more in the United States.

Nine out of 10 home Internet users overall are primarily interested in researching information or sending and receiving e-mail, according to the PwC survey.

The recent failures of several online entertainment companies demonstrated that the business models for online entertainment are not fully developed. In order to make the Internet a viable alternative source for entertainment, broadband access must increase in hand with more compelling content, PwC said.

The server channel is going strong

Those who think the server channel is dead or dying had better think again. The server channel going strong - in some cases, stronger than ever and, according to IDC, much opportunity exists for channels, although the server market will have to overcome new challenges.

The challenge is that new channels keep emerging and along with these merging channels come different business models. The key is for vendors to choose the right type of channel while constantly assessing their partners and keeping a watchful eye on the market to ensure they are aligned with the right companies.

According to IDC, indirect channel revenue will increase at a compound annual growth rate (CAGR) that is almost twice that of the direct channel. In terms of price band, a huge opportunity exists for the channels in the lower bands.

In 1999, entry server sales accounted for 53 per cent of all server revenue. By 2004, that proportion will inflate to 58 per cent. IDC said it is absolutely essential that server manufacturers work with existing and emerging channels to develop a collaborative model. One of the changing models is greater shift towards the use of the Internet as a channel. With so many customers struggling to become "e-enabled", the services opportunity and integration required are quite extensive, and customers are looking to the indirect channels for these solutions, IDC analysts noted.

Broadband coming to non-PC devices

Broadband content is where it's at, and high-speed pipes will become a more pervasive vehicle for providing entertainment in the US during the next five years, according to a new study by Forrester Research. The study suggests that by 2003 users will get their broadband content fix through three primary channels: PCs, televisions and game consoles. Streaming interactive content and software updates will be the domain of PCs, while multimedia-focused entertainment will move toward TVs and gaming consoles.

Everyone expects broadband to grow rapidly and create a market for new types of high-speed enhanced content. What is unexpected is that most of broadband's impact will be directed to other devices besides the PC.

By 2005, 191 million devises will connect via broadband, of which PCs will constitute only 36 per cent, Forrester forecasts. With this, the PC's monopoly over broadband will be challenged. PCs will be used only for practical activities that involve complex, highly interactive tasks, as well as software downloads, according to Forrester.

Aust Web hosting market booming.

Australia is undergoing an explosion in both demand for and supply of robust Web-hosting services, according to a report from IDC. The Internet economy now encompasses and affects far more than just thc IT industry that fosters it. Web hosting forms a core component of this economy because in many respects hosting is its platform or foundation and without Web hosts there would be no World Wide Web, which is now the leading Internet services, says IDC.

According to IDC, the Australian Web hosting market reached $A42 million for midyear 2000 and the Internet research company expects the market to exceed $105 million by yearend 2000. This growth is being boosted primarily by companies' efforts to establish and expand their Web presence and e-Business profiles.

According to IDC, 74 per cent of customers now adopt a shared Web-hosting solution, although IDC believes that in coming years the dedicated hosting market will grow in importance and size. While today many sites are information-based and static, more and more will begin to support dynamic e-commerce-enabled activities as well as interactive applications, and will need to move towards some form of dedicated hosting environment.

Dialup rules for China's electronics companies A survey by the Web site, which claims to be officially endorsed by the China Electronic Chamber of Commerce, unveiled that 64 per cent of electronics and computer companies in China still use-dial-up Internet access, although they are early adopters and users of Internet technologies.

A recent member survey initiated by Bizipoint, also found that 27 per cent of companies are connected to Internet via leased lines with the remaining nine per cent having broadband network access. The results indicated that the technology infrastructure in China may post obstacles on the future e-commerce development of electronics and computer companies.

Bizipoint describes itself as a unique B2B e-marketplace for the electronics and computer industry in Asia. It has registered over 6000 online members so far, representing one-third of the Chinese market. A small portion of its members comes from more than 40 countries worldwide. The recent survey of Bizipoint was conducted to investigate its members' attitude and adoption of e-commerce, a spokesman explained.

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