IT market picks up after Year 2000 worries subside

E-business, customer relationship management, the internet and wireless application devices have put the IT industry on the road to recovery following the Year 2000 sales slowdown.

E-business, customer relationship management, the internet and wireless application devices have put the IT industry on the road to recovery following the Year 2000 sales slowdown.

A survey by market researcher IDC found that the industry in EMEA was rebounding from the lockdown, with the market expected to grow by 9.6 per cent this year.

The industry is expected to have shed all effects of the slowdown by next year, with growth expected to return to the 1998 level of 10 per cent. After that, it is expected to remain in double digits for the foreseeable future, reaching 11 per cent in 2003.

"This growth is fuelled by demand for software and services which is compensating for a slowdown in hardware due to aggressive pricing," the report said.

IDC said the results prove that Y2K did not had a "dramatic effect" on investment.

Stephen Minton, research manager at the IDC EMEA Markets Centre, said while some vendors were anticipating disappointing growth rates, signs did not indicate that IT performance will be inhibited.

"If a vendor is struggling because its hardware revenues are shrinking, it needs to ask why its services business isn't growing at a rate that can compensate for it," he said.

But analysts predict growth in western Europe will drop one per cent to nine per cent this year. The software market is set to grow by 14 per cent this year, Minton said.