The total European market value for ebusiness services will rise from $4.2 billion in 1999 to $28.6 billion in 2004, according to IDC. These bullish predictions of growth in the European ebusiness market are foreseen across the next five years as the rush to adopt IP modes of business operation shows no sign of slowing down.
"The strongest growth within the European ebusiness services space lies with Internet operations management, which includes outsourcing the entire process," said Euan Davis, IDC`s European eBusiness Services Strategies research analyst. "Organisations are predicted to become comfortable with deploying and maintaining resource-intensive ebusiness initiatives. Outsourcing the entire process end to end reduces the associated pressures arising from both cost and resources and enables internal staff to address more strategic issues."
Trends in the European eBusiness services market
One of the difficulties of eBusiness is its very nature - speed and innovation characterize the industry. It is difficult to generalize about drivers (apart from the obvious communication infrastructure and connectivity) for growth in Europe because they vary country by country. However, a number of drivers will impact the market and have ramifications for service providers:
Mobile commerce:
Mobile commerce is currently one of the hot topics within Europe. Improvements in WAP technology and regionally one of the highest rates of cellular phone ownership make Internet on the move a reality. European service providers now have a real opportunity for leadership in this area. News events within the last six months support this statement and reveal a tendency toward news from the banking industry, which is now quickly moving financial services onto this platform. Mobile commerce will change the face of ecommerce within a very short time frame, and Europe has the opportunity to challenge the digital leadership established by the United States.
The application service provider (ASP) phenomenon:
The ASP market is predicted to increase dramatically over the next five years and displace existing spending within the software industry. Service providers in the past have generated significant revenue as a result of implementation and ongoing maintenance activities. The ASP phenomenon represents a seismic shift in application delivery. Providing functionality as a service rather than a product will force fundamental change in the method of application delivery, creating significant challenges for service providers. Service providers will need to develop dedicated methodologies for effectively delivering and managing an application project. Providing services through the new breed of ASPs or delivering direct are set to become an integral part of a service provider`s offering.
Increased prevalence of European Internet culture:
More of the European population is moving online, a move actively encouraged by a number of national governments. "Business-to-citizen" initiatives are in place encouraging more widespread uptake and acceptance of the Internet and its associated purchasing activity. In addition, the media industry is playing its part; a number of leading European daily newspapers are now published online, and journalistic content is generally favorable regarding the Internet and the realities of ebusiness. The increased interest in the Internet from European populations will force existing businesses to address the demands of ebusiness and create a generation of start-ups eager to capitalize on the opportunity available. Service providers will frequently be required to create and adapt to the more innovative and flexible business models that will arise.
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