Software support and integration is changing from a necessary evil to a strategic initiative in vendors` eyes. According to IDC, vendors are now looking to software support and integration services as a way to get closer to their customers and as a revenue generator.
"As margins in both the hardware and software markets shrink and product differentiation diminishes at an increasing rate, vendors are looking to their service offerings to provide greater margins as well as a basis of differentiation," said Ana Volpi, senior analyst for IDC`s Software Support and Integration Services research. "As a result, the services provided around software, specifically integration and support services, have taken on a more strategic role than in the past."
As the nature of software support and integration shifts, the market`s worldwide revenues will ride a growth wave that will bring them from $35.2 billion in 1999 to almost $71 billion in 2004. "This growth reflects vendors` realization that support is a vital ingredient in establishing deeper and stronger customer loyalty," Volpi said.
The United States represents the largest opportunity for software support and integration services. In 1999, it accounted for 51% of worldwide revenues with $18 billion. Its share will remain at 51% through 2004 when revenues exceed $36 billion.
In terms of service activities, predictive/preventive maintenance is growing the fastest, with a 1999-2004 compound annual growth rate of 33%, compared with a CAGR of 15% for the overall market. Electronic support, remote diagnostics, and software update management are also growing quickly, with CAGRs of 32%, 27%, and 15%, respectively.
"These fast-growing services reflect the importance of support technologies that enable a proactive, self-service support model and highlight the movement in the support industry to transform the support organization from a reactive cost center to a valuable, important, and revenue-generating business model," Volpi said.
Share
International Data Corporation (IDC)
BMI-T has established a long-standing business relationship with the International Data Corporation (IDC). With research centres in over 40 countries and more than 500 research analysts and 3 900 clients world-wide, IDC provides a global market perspective on IT market and technology trends.
As the exclusive South African partner of IDC, BMI-T has instant access to IDC`s formidable knowledge base and consulting skills, and is positioned to offer African clients access to the full range of IDC `s global research.
For more information on IDC products and services, please visit IDCSA on http://www.info@bmi-t.co.za, or contact:
Laurika Kapp
IDCSA Accounts Manager
Tel: + 27 11 803-6412
Fax: + 27 11 803-784
E-mail: Laurika@bmi-t.co.za
BMI-TechKnowledge Group (BMI-T)
BMI-TechKnowledge (BMI-T) is Africa `s leading supplier of market intelligence and knowledge-based consulting in the areas of IT, telecommunications and broadcasting.
Formed over fourteen years ago, BMI-T provides its clients with an unmatched and comprehensive range of unbiased market knowledge. BMI-T conducts more than 20 000 market research business-to-business and business-to-consumer interviews and more than 100 focus group projects every year.
BMI-T has an active ongoing research publications business that has consistently published research-based market analysis covering many facets of the IT, telecommunications and emerging media sectors. This knowledge base provides the platform on which we build our customised research and consulting, including assignments such as market entry strategies, product entry strategies, channel and distribution analysis and African research.
For more information please visit our Web site www.bmi-t.co.za