IDC Revises Software Market Growth Forecasts

Growth for companies in the market of developing and deploying software applications is due for a downward turn in 2001 according to forecasts from analyst firm International Data Corp. (IDC).

In its annual report, Worldwide Software Market Forecast Summary, 2001-2005, IDC says that due to the events of September 11 coupled with the current economic recession, the steady growth of the worldwide packaged software market is now expected to spiral downward to 6.8 percent growth in 2001, 5.2 percent less than the firm’s original 12 percent forecast.

Focusing on its three primary software market segments; applications, application development and deployment, and system infrastructure software, IDC says that each will suffer reduced growth.

And although IDC expects growth recovery in 2002, the rebound will be less significant than expected with most recent figures at 11.8 percent, still less than the 15 percent originally forecast.

The report breaks down figures for each market segment:

• The application development and deployment market will experience the greatest reduction in growth in 2001, with growth of 4.7 percent, down 10.5 percent from IDC’s original 2001 forecast of 15.2 percent growth expectancy.
• The applications market will also grow less than expected, from 12.7 percent originally projected in 2001 to 9.4 percent, and a decrease from a forecast of 14.6 percent to 9.1 percent in 2002.
• System infrastructure software market will grow only 4.6 percent in 2001 instead of the originally projected 8.4 percent, but will grow to 11.8 percent in 2002, just 1.2 percent lower than previously forecast.

“The globally weak economy and the reduced software growth rate will cause a change in the way software is being purchased,” said Tony Picardi, senior vice president of Global Software at IDC.

“This will result in a changed industry structure involving a rapid increase in the use of security and a continual increase of infrastructure, tools, and applications used to advance personal connectivity of all kinds,” he predicts.