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Corporate Internet Spending Poised to Triple Soon

With business transactions fueling the Internet industry's fire, corporate spending is predicted to triple, from $85 billion in 1999 to more than $203 billion by 2002, according to a recent report by International Data Corp..

To remain competitive, businesses will increasingly use the Internet as a tool to increase efficiency, innovation and audience, said Anna Giraldo, senior analyst with IDC's Internet and eCommerce Strategies Group. Confidence in the Net as a business tool is rising, which will spur greater use as well.

No one market will emerge a leader, but IDC predicts the top spenders will be financial services, $16.6 billion; manufacturing, $24 billion; retail, $6.2 billion and online media, $10.7 billion.

The success of e-commerce will be the primary factor driving spending up, IDC said.

"The good news to IT vendors wanting to capitalize on the Internet revolution is that there is a considerable opportunity out there. The challenge is to be able to recognize how and where the spending occurs and why," Giraldo said.

The report, "Internet Futures Spending Model 1997_2002: Business Gears Up for E-Commerce," provides the framework to forecast the amount of money companies will spend to develop the Web infrastructure, including money spent on external suppliers of hardware, software and services as well as internal expenses for salaries, benefits and overhead associated with the company's own Web development/management team.