Investments in Internet infrastructure will cause the I-Economy to reach $2.8 trillion by 2003

The worldwide Internet economy will soar past the $1 trillion mark in 2001. By 2003, it will be well on its way to a remarkable $3 trillion. According to a new report from International Data Corporation (IDC), there are three key elements to the Internet economy -- Internet commerce, Internet IT infrastructure, and Internet business infrastructure -- and the three are shifting in importance in terms of contributions to the Internet economy.

"In the early Internet economy years, investments focused around technology products and services to strengthen the infrastructure, achieve critical mass, and introduce online users to commerce," said Anna Giraldo Kerr, senior analyst for IDC`s Internet and eCommerce Strategies research program. "Now, however, non-technology spending is slowly catching on. The marketing and sales functions, along with content creation, will take a lead role in enhancing the Internet experience and stimulating Internet commerce."

Other key findings from IDC`s report include the following:

.         For every dollar of ecommerce revenue generated in 1998, 93 cents were directly invested in the Internet commerce infrastructure. IDC expects corporations to increase their investments significantly to improve this ratio by 2003.

.         Technology investments accounted for 52% of worldwide Internet spending. But in 1999, for the first time, IDC expects non-technology investments to surpass technology investments. By 2003, technology investments` share will have decreased to 39%. "Building the infrastructure to support Internet commerce is not cheap," said Frank Gens, senior vice president of IDC`s Internet research. "Everyone praises the benefits of Internet commerce, but few understand the size of the investment required, and fewer still understand that technology infrastructure is just a part of that investment."

IDC`s new report, The State of the Internet Economy Trends Forecast, 1998-2003: Investments Will Fuel Commerce, examines the various components of the Internet economy: Internet commerce, Internet IT infrastructure, and Internet business infrastructure. Worldwide and U.S. forecasts for the Internet economy through 2003 are provided segmented by the three major components as well as five subcategories. Internet infrastructure nvestments and investment per Web user are compared by five regions (the United States, Western Europe, Asia/Pacific, Japan, and the rest of the world). The report analyzes how the Internet economy will shift through 2003 and discusses how Internet infrastructure investments are driving Internet commerce and looks at the ratio of money spent on infrastructure to money generated by Internet commerce.