IDC: Spending and offshore outsourcing to rise in 2004
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Analyst group IDC has forecast a rise in technology spending and a boom in offshore outsourcing during 2004.
5 December 2003 Analyst group IDC has forecast a rise in technology spending and a boom in offshore outsourcing during 2004, but a stalling in interest in utility computing and radio frequency identification (RFID) tags.
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Positive economic news from the US during November and early December were the main reasons for IDC's forecast, but confidence is fragile and could easily be knocked, suggested analyst Frank Gens.
But utility computing is plagued by confusion about its value and its benefits to business, while RFID simply is not yet mature enough for widespread adoption. Quite apart from the cost, RFID tags still suffer from interference to a certain extent, and a lack of standards, although both problems are being addressed.
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Either way, IDC expects offshore outsourcing to double from about $8 billion this year, to $16 billion in 2005 and then to triple in the two years to 2007, increasing to $46 billion.
However, this boom will come at the expense of smaller services companies in the US and Europe, particularly those which lack a significant offshore presence. They will be squeezed by the services giants that are fast ramping up their offshore centres.
Other current trends that IDC expects to continue include the further commoditisation of hardware and operating environments, partly driven by the open source operating system Linux, and the spread of wireless networking and particularly wireless 'hot spots', wireless public access Internet points.
However, adoption of wireless networking in the corporate sector may slow down due to security concerns.
