Overall spending on software and services in Europe during 1993 will grow by only 6% as a result of depening recession on the continent. But as the recession eases over the next five years, the average growth rate will rise to 9%. These are the findings of London-based market research and consulting firm, Input Ltd, after questioning 400 leading European software and services vendors. Analyst for the European software and services market Roger Fulton also said that the survey indicates that spending patterns were changing. Essentially, the recession has meant that companies’ information technology budgets are generally not even rising at the rate of inflation. And data procesing managers are becoming increasingly aware they must prove the business case for new purchases because business managers are demanding to see clear value for their money. As a result, customers are looking for computer architectures that match a company’s own business architecture – one of small business units. And this has led to immense growth in the demand for client-server systems, Unix obviously being included in this. While Fulton said that six months ago, there were hardly any products or services available in this arena, he now forecasts growth of between 70% and 80% per annum if things continue at current rates. Furthermore, traditional software houses are finding that customers no longer require customised software. Instead they want standardised off-the-shelf packages that are easy to integrate. This has led to increased demand for systems integration skills – which are forecast to show 19% compound annual growth; network services – a market forecast to grow at 17% per annum; and application software, with an estimated 12% growth rate. The fastest growing sector of all, however, is facilities management. This is forecast to grow at a 20% annual compound rate as companies decide that they want to concentrate on what they judge to be their core activities, leaving the provision of their computer services to somebody else that they hope will be able to do it cheaper and better. No real growth is expected in such areas as bureau services or contract labour. Individual industry sectors are also changing their spending patterns. Organisations that have formerly over-invested in massive data centres, such as banks, are freezing their expenditure, while distributed businesses, such as companies involved in transport, now find they can afford to buy technology and get a return on it. Finally, Fulton believes that the UK and Germany will lead recovery in the rest of Europe – the UK because well managed UK vendors that have survived the past few years of recession are in better shape to succeed than most of their European competitors; and Germany because it is in a prime position to exploit demand for technology in Eastern Europe on a long-term basis.
