Canadian IT spending will remain in the three to five per cent range in 2006, with multi-core processors, virtualization and wireless technology driving growth, IDC Canada predicted.
In its annual forecast of technology trends, the research firm said the Canadian information communications and technology (ICT) market will reach $74 billion this year, and approximately $80 billion by 2008. The industry employs about one million people, or seven per cent of the total workforce, IDC said, who contribute $30 billion in taxes.
While the growth is far below the double digits that were commonplace less than 10 years ago, IDC country manager Vito Mabrucco said a slowing interest rate, a stronger economy and healthy balance sheet in corporate enterprises will bring continued opportunity to vendors and their customers.
“Notwithstanding the fun and games and name-calling as we prepare for the election – if I can still use the word ‘notwithstanding’ – it is a stable business and political environment,” Mabrucco said. “While consumers will contribute to growth, the main contributions are coming from business investment.”
IDC predicted the introduction of multi-core processors from firms such as Intel and AMD would have IT managers rethinking their infrastructure procurement strategies. This in turn would result in a rationalization of servers, lowering purchasing and administration costs while creating systems that run at a lower frequency and consuming less power. “Licensing issues may damper user enthusiasm,” Mabrucco admitted. “Should the pricing be based on utilization, per CPU or on a core basis? What about grid computing environments? All these will need to be worked out.”
Virtualization software that allows applications to sit side by side but isolated on the same server, meanwhile, is breaking the link between the common requirement that hardware runs on a dedicated server, and the results are often dramatic, Mabrucco said. This will lead to greater return on investment and resource utilization, according to IDC. Multiple workloads will also move from one system to another, offering greater automation and lower management costs, Mabrucco said.
The rise of on-demand computing means IDC Canada will also begin to start tracking subscription revenues for software-as-a-service offerings from companies such as Netsuite and Salesforce.com, Mabrucco said. “Canada will see strong adoption of hosted sales force automation and CRM,” he said. “It’s becoming applicable as enterprise applications develop into more role-based suites.”
