Key worldwide trends in IT

This article is based on the key information technology predictions based on trends, made by International Data Corporation in its annual briefing.

The Web will drive businesses, which will in turn lead the growth in IT users. From a population of about 82 million users (1997), the web user fraternity is expected to grow to 329 million by 2002. Clearly business houses cannot ignore such a major growing segment but then they will have to make themselves ready to interact and do business with this community. More and more users will be attracted to this medium given its immense possibility for information, entertainment, business, communication and leisure. It is expected that the market for web commerce which is worth about $8 billion now will grow to over $330 billion in 2002.

The Web will reach mass-market proportions and this will mean that information technology, or the 'computer' as it means to the layman, will no longer be a luxury. Current figures suggest that IT activity in terms of spending on IT products and services has been concentrated in the corporate sector which is almost a diagonal contrast to the world-wide GDP.

The unaddressed majority, that is, the consumer segment, will now begin to "flex their muscles" and drive IT trends. The consumer will replace the corporate user as the centre of the PC market. For the consumer market to grow, a sub-$700 PC will be a major breakthrough by the end of 1999.

Information appliances will move into the picture. The sub-$1000 PC has created a new wave of change in the marketplace. What it has done among other things, is that it has reduced access rates to the Internet, directly and indirectly. The basic hardware is now cheaper and affordable to a larger population and Internet access has been one of the prime reasons for acquiring and using a PC. Internet access providers are now following suit to slash prices, now that they have access to a larger volume of users. This effect is bound to compound in different stages as the base price falls to $500, to $200 and finally to $100. This surge will drive towards Internet appliances and applications like set-top access devices, Web TV, screen phones, net-based video conferencing, etc which will enable access to Internet. These will redefine the market.

Non Intel processors will reduce Intel's domination. Non-Intel chips will emerge as major alternatives in the processor market. This will force price cuts. The Celeron range of processors from Intel is the first step towards that. Here also, the breakthrough price will be a sub-$20 processor.

Non-Windows operating systems. As IT moves towards appliances, the requirement will be of a 'light' operating system or platform for these appliances. Currently, Windows seems to be technology-heavy to be ported onto the appliances. The pre-runners would seem to be the Pilot/OS of PalmPilot. Here again, Microsoft might take the lead in developing the appliance platform with its experience in developing CE for the "palmtops".

ISPs represent a major customer segment. As the Internet grows, the service and access providers will emerge as a key segment for IT purchases. About 36 per cent of WAN purchases and 51 per cent of networking purchases are expected to be made by the ISPs, besides high end and medium range servers and related software.

New technologies. The web will drive and facilitate development of technologies like digital certification and authentication, web-based sounds, non-Roman script/language software, web audio and video transmission.

Mega Mergers of IT companies. The recent mergers and acquisitions like Compaq-Digital, Netscape-AOL are just a prelude to mega mergers as companies try to derive and leverage on advantages based on market orientation, core competencies etc. Probably, rivals may become partners in strategic alliances and joint ventures, while larger companies will gobble up smaller rivals.