IDC: Software spending to pick up in 2003

Despite economic difficulties tied to accounting scandals and to the looming prospect of war on Iraq, revenue in the worldwide packaged software market will grow by around 4 per cent in 2003, after slower growth of around 1.5 per cent in 2002, according to IDC.

Applications such as operating systems and business software will be the largest area of spending in the software market in 2003 as compared with 2002. Global spending on applications will grow to US$131 billion by 2006.

Meanwhile, application development and deployment promises to be the fastest-growing software segment through 2006, growing 11.5 per cent annually, according to a statement released by IDC.

“Application development is something that has been put off for several years because of the recession. Companies have been saying, ‘New tools for our developers? We can put that off.’ But the emergence of Web services and XML-enabled tools to develop those services are a reason to buy those new tools,” said Tony Picardi, senior vice-president of global software at IDC.

Growth in the software market is expected despite the lack of any obvious “killer app” to stimulate development, said John Gantz, Chief Research Officer at IDC’s Global Research Organization during a conference call to discuss the IT forecast.

Despite a cautious environment amongst buyers of information technology, polls conducted by IDC showed a willingness to purchase necessary technology, according to Gantz. Chief information officers polled by IDC were optimistic about the prospects of the U.S. economy and their own companies and expect to increase their IT spending about six percent over the next year.

Gantz and other IDC analysts said that technology spending will increase in coming years as companies look to technology to gain efficiencies in their business processes, more and more households move to broadband Internet access, and as computing technology expands from personal computers to mobile computing devices and embedded computers.