IT growth expected in 2003

War in the Middle East will be the difference between positive and negative growth in the Canadian IT market this year, says an IDC Canada analyst.

The industry could grow by a modest three per cent in 2003 if there is a second-half recovery of the North American industry, says Vito Mabrucco,

group vice-president for the Canadian division of the research company. While the hardware sector would continue struggling, with spending dropping by five per cent over last year’s level, it would be offset by positive growth of eight per cent in the software and services market.

Understandably, however, those figures depend on economic, political and military stability.

“”If we have war in Iraq it causes uncertainties in everything from the price of oil to the impact on business confidence,”” said Mabrucco. “”It creates a downside scenario which could put us in another year of negative growth.””

Mabrucco’s comments were milder than those of IDC research chief John Gantz.

“”There will be a major cyber-terrorism event in 2003. It will be enough to disrupt the economy, bring the Internet to its knees for a day or two.””

“”A war in Iraq will galvanize hackers in terrorist ranks, Gantz said. One person has already threatened to unleash a mega-virus if there is war,”” he added.

The blueprint for such attacks is the denial-of-service assaults on the Internet’s root servers in October, he said, although it only caused the Net to slow down. Still, he said the “”opportunity for some sort of electronic disturbance of online transactions could happen pretty easily.””

Asked if security therefore should be businesses’ No. 1 priority, Gantz said “”probably, yes.””

But he added that surveys of CEOs and CIOs have shown security has been their main worry for the past three years.

That’s mainly the reason why security-related software (anti-virus, intrusion detection, disaster recovery and associated applications) is the fastest growing area of information technology spending, he said.

In a later interview, Mabrucco added that IDC’s fear of a major disruption of IT networks doesn’t depend on a war, but is based on their current vulnerability and the relative ease with which they can be targeted.

Gantz acknowledged that IDC’s track record isn’t perfect. Last year it predicted the IT sector would rebound in the second quarter, that Linux would have “”a breakout year”” (in his defence Gantz said sales of Linux hardware did do well) and that there would be major use of digital ID like Microsoft’s Passport.

IDC believes the outlook for the global economy is “”kind of mixed,”” said Kevin White, research manager for IT markets and strategies. While business investment in the U.S. picked up in the last quarter, Western Europe continues to struggle and there’s doubt recovery in Japan is sustainable.

Other predictions:

• Spending in the information, technology and telecommunications market worldwide will hit US$1.9 trillion with about six per cent growth. Much of that growth will be due to spending on hardware (mainly storage, networking and servers) and wireless services;

• Sales of mid-range servers will rebound from a 20 per cent drop last year to positive growth due to their increasing power;

• Adoption of Intel’s 64-bit Itanium processor will be slow;

• “”Linux will eat Unix”” as low-cost Linux clusters become used increasingly by business;

• Consulting companies will again see spending on project-based IT services down or flat due to the slowdown in adoption of complex enterprise applications and the focus on short-term projects;

• Wireless local area networks will take off, slowing development of third-generation (3G) networks by telecommunications companies in North America. Carriers will use wireless LANs as cheap, fast gateways into their networks;

• Telecom spending will again drop worldwide, despite increases in developing countries such as China;

• By the end of the year more images will be captured by digital devices than on film; and

• There will be more spam in your inbox as messaging explodes.

Mabrucco also cautioned resellers and vendors — if they haven’t learned already — that the years of double-digit growth in the overall IT market are over forever.

“”You’re not going to be able to ride a wave of growth any more to grow your company,”” he said. “”You’ll have to get growth the old-fashioned way, by taking it.””

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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