1993 U.S. Information Services Market Forecast

6 Pages·1993·0.36 MB·English

September1993
INPUT Vol.IV,No.12
MAP
Routeto:
Research
Bulletin
APublicationfromINPUT'SU.S.InformationServicesMarketAnalysisProgram
This Just In! INPUT'S 1993 U.S. Information
Services Market Forecast Completed!
1993Forecast 1998. The12%rateisacontinuationofthe
five-yeargrowthratesforecastin1991and
InearlySeptemberINPUTcompletedits 1992,andreflectsthecontinuingeffectsofthe
preliminaryconsolidatedU.S.Information lingeringeconomicslowdownandthe
Servicesmarketforecast. Thecompleted anticipatedslowpaceofrecovery.
forecastwillbedeliveredlaterthisyearasthe
U.S.MarketForecastCompendium,anannual Asamatterofinterest,Figure1shows
reportissuedaspartofINPUT'SMarket INPUT'SU.S.InformationServicesfive-year
AnalysisProgram(MAP). compoundannualgrowthratesforthelast
sevenyears. Forecastgrowthdeclinedfrom
Theforecastoffersdetailedfive-yearfinancial 17%in1987and1988tothe12%projectedin
projectionsforfifteenSIC-definedindustry
marketsandsevencross-industry(non- Exhibit1
industry-specific)markets. Foreachmarket, U.S.InformationServicesMarket
1992actualand1993through1998forecast Five-YearGrowthRates
expendituresareofferedforuptoseven
product/servicedeliverymodes,including
processingservices,turnkeysystems, INPUTFive-Year
applicationssoftware,systemsoperations, Five-YearPeriod CAGR(Percent)
systemsintegration,professionalservices,and 1987-1992 17
networkservices.
1988-1993 17
Tofhethdeactoanbsaosleidcaotnetdai1n9i9n3gUt.hSe.fifnoarleccaosmtphoansenmtosre 1989-1994 15
than6,000discreteelementsofdata. 1990-1995 13
Overview 1991-1996 12
1992-1997 12
TheU.S.InformationServicesmarketwill
continuetogrowata12%compoundannual 1993-1998 12
rate(CAGR)tomorethan$236billionby
Source: INPUT
©1993byINPUT.Reproductionprohibited.
RESEARCHBULLETIN
1991,1992and1993,parallelingtherecent growingtrendtowardsoutsourcingof
trendsintheU.S.economy. informationsystemsresourcesasmore
businessesreturntocorecompetenciesinorder
Althoughtherewillnotbeanimmediatereturn toeffectivelycompeteinthe1990s.
tothego-goyearsofthe1980s,14of15
verticalmarketsshowveryrespectabledouble- WorstGrowth-Processingservices,systems
digitfive-yearcompoundannualgrowthrates, software,andturnkeysystemswillhavethe
rangingfrom10%to17%. Sixoftheseven lowestfive-yeargrowthrates. Processing
cross-industrymarketswillalsogrowfrom servicesarereactingtodecreasedornegative,
10%to17%overthenextfiveyears. growthforbothtransactionandutility
processingservices. Thebrights—potisthe
DeliveryModes: What'sUp? stronggrowthin"other"services suchas
disasterrecoveryservices.
BestandWorstFive-YearGrowthRates-
Exhibit2identifiesthethreedeliverymodes Thesystemssoftwareproductmarketisbeing
withthebestfive-yeargrowthrates,andthe affectedasfewerandfewermainframesare
threewiththeworstfive-yeargrowthrates. shipped,withacountertrendofincreasing
salesoflower-costPCsystemssoftware. By
BestGrowth-Applicationssoftwarebenefits 1998,themarketforsystemssoftwareproducts
fromtheboominsoft—wareproductswrittenfor fortheworkstation/PCplatformwillbe25%
workstationsandPCs anareagrowingat greaterthanthatformainframeplatforms.
morethantwicetherateofthemarketsfor Today,themainframeproductshavealmost
mainframe-andminicomputer-basedsoftware. 43%ofthesoftwareproductsmarket,while
By1998,workstation/PC-basedsoftware workstation/PCproductshave24%and
productswillcommandalmosttwo-thirdsof minicomputers33%.
theapplicationssoftwaremarket.
Exceptforafewindustry-specificmarkets,
Networkserviceswillcontinuetobeamajor suchasdiscreteandprocessmanufacturing,the
growthareaasbothelectronicinformation marketfornew,dedicatedturnkeysystems
servicesandnetworkapplicationsrespondto appearslimited. Althoughthereissomegrowth
Americanindustry'salmostinsatiabledemand projected,themajorityofitwilloccurin
foron-linedataandsophisticated turnkeysystem-relatedsoftwareproductsand
communicationssystems. Systemsoperations, professionalservicesandnotinequipment
especiallyintheareasofdesktopservicesand sales.
networkmanagement,willbenefitfromthe
Exhibit2
DeliveryModeFive-YearGrowth Rates
Best Worst
ApplicationsSoftware ProcessingServices
NetworkServices SystemsSoftware
SystemsOperations TurnkeySystems
Source: INPUT
2 e1993byINPUT.Reproductionprohibited.
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RESEARCHBULLETIN
Exhibit3
DeliveryMode1998MarketSizeExtremes
1998
Consideration DeliveryMode Size($B)
TheLargestMarket ApplicationsSoftware 48
TheSmallestMarkets SystemsIntegration 19
TurnkeySystems 20
Source: INPUT
MarketSizeExtremes-Exhibit3identifiesthe IndustryMarkets- -What'sHot?
deliverymodeswiththelargestandsmallest What'sNot?
1998markets.
TopMarkets-INPUT'Sresearchandanalysis
Applicationssoftwarenotonlyhasthelargest hasidentifiedtheindustrymarketsnotedin
shareoftheU.S.InformationServicesmarket, Exhibit4asthosewitheitherthebestISmarket
$48billionin1998,i—talsohasthethirdhighest growthratesorthelargestmarketsizein1998.
five-yeargrowthrate threepercentagepoints
abovetheISindustryasawhole. Thesmallest GrowthRates-Thegrowthratesofthediscrete
markets,systemsintegrationandturnkey andprocessmanufacturingindustriesare
systems,willstandat$19billionand$20 benefittingfromtheresurgenceofAmerican
billion,respectively,in1998. Butthesystems industry,retaildistributionfromthereturnof
integrationmarkethasa14%five-yearCAGR, theAmericanconsumerwithmoneytospend,
whileturnkeysystemshasonlyan8%rate. andtelecommunicationsfromthevirtually
Exhibit4
TopMarkets
ByFive-YearGrowthRate BySizein1998 (Dollars)
DiscreteManufacturing BankingandFinance
PlanningandAnalysis* DiscreteManufacturing
ProcessManufacturing FederalGovernment
RetailDistribution HealthService
StateandLocalGovernment ProcessManufacturing
Telecommunications StateandLocalGovernment
*Cross-industrymarket Source: INPUT
©1993byINPUT.Reproductionprohibited.
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RESEARCHBULLETIN
limitlesscornucopiaofnewandimproved Exhibit5
communications-basedproductsandservices. MarketsWithSlowest
Stateandlocalgovernmentspendingisgrowing
asmoreandmorereponsibilityandfundingis GrowthRates
beingshiftedtotheseareasfromthefederal
sector. Allindustriesuseplanningandanalysis •EducationandTraining*
etovebre-ttcehrandgeialngwbiutshitnheesscoemnpvlierxointmieenst.oftoday's •EngineeringandScientific*
•FederalGovernment
1998MarketSize-Thesixindustriesnoted •HumanResources*
uInnfdoerrm"aStiizoen"Sweirlvlicoefsfeirnth1e99l8a.rgeTshtemadriskcertestefoarnd •SalesandMarketing*
processmanufacturingandstateandlocal •Transportation
governmentmarketswillbenefitfromstrong
CAGRs,whilethefe—deralmarket,alwayslarge, *Cross-industrymarket Source: INPUT
willremainthatway eventhoughithasone
ofthelowestfive-yeargrowthrates. Banking Exhibit6
oapnpdorftiunnaintcees,wialnldcotnhteihneuaeltthoosfefrevricmeasjsoerctIoSr SmallestMarkets*in1998
(calledMedicalinlastyear'sindustrylist)
offersopportunitiesforbothclinicaland •EducationandTraining
administrativeapplications.
•EngineeringandScientific
Wsihdaet'ofstNhoetwHhoatt'-sEhxohtibciotisn—5atnhedm6aorfkfeetrtsheectfolrisp •SalesandMarketing
thataregrowingattheslowestrates,andthe Source: INPUT
onesthatwillbethesmallestmarketsin1998.
*AIIarecross-industrymarkets
SlowestGrowthRates-AsnotedinExhibit5,
fourcross-industrymarkets,plusthefederal specificISproductsandservices. Ascross-
sectorandthetransportationsector,willhave industryISservicesbecomeimportanttoan
theslowestgrowthratesduringtheperiod enterprise,theyarefoldedintothesuiteof
1993-1998. AsseeninExhibit4,thefederal applicationsorservicesmostusefultothat
sectorwillstillbeamajormarketin1998,but companyinthatindustry,andthusbecome
asvariousClintonAdministrationcost-savings industry-specific. Industry-specificISproducts
programsareimplemented,expendituresfor andservicesare,ofcourse,accountedforinthe
informationservicesareexpectedtodecline. appropriateindustrysector.
Thetransportationindustrysuffersfromunder
utilizationandoverregulation,andseemsto SmallestMarkets-Thethreesmallestmarkets
alwaysbedealingwithdecreasingprofits,but in1998areallcross-industrymarkets. They
itsgrowthrate(CAGR)isexpectedtoremainat alsosharethelowestcross-industrygrowth
asteady10%overtheforecastperiod. ratesandhavethesmallestrevenuebasesin
1993. INPUTnotesthatalthoughthesemarkets
Thefourcross-in—dustrymarketsareallvictims aresmall,theyarestillviable,andrepresent
ofthesametrend asthecomplexityof reasonableopportunitiesforthosevendors
businessgrows,itbecomesmoredifficultto choosingtoaggressivelypursuenichemarkets
identifyandsuccessfullymarketnon-industry- orspecializeintheareasnoted.
4 ©1993byINPUT.Reproductionprohibited.
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RESEARCHBULLETIN
Filmat11:00
Thisbulletinoffersavarietyofstatementsand
chartsillustratingwhichmarketsegmentsand
deliverymodesaregrowingornotgrowing,but
canonlyprovideabriefoverviewofmarket
sectoranddeliverymodegrowthpercentages
andamounts. Thisinformation,including
detailedmatricesofpreciseexpendituresand
percentagesbymarket,modeandsubmode,is
containedinINPUT'SMarketAnalysis
Program's(MAP)1993reportson22vertical
industryandcross-industrymarkets,andeight
deliverymodes.
INPUTReports-Eachreportoffersadetailed
analysisofthemanyfactorsinfluencingeachof
thesemarkets,considerstrendsandissues,
discussestheresultsandanalysisofhundreds
ofvendoranduserinterviews,andpresentsthe
reasonsbehindthenumbers. Alsoprovidedisa
detailedreconciliationtothe1992forecast.
1993ForecastCompendium-IntheFallof
1993,INPUTwillpublishits1993U.S.Market
ForecastCompendium,acompletelistingofthe
ISexpendituresforeachU.S.marketsegment
anddeliverymode. Inaddition,the
Compendiumwillcontainconsolidatedtotals
forbothindustriesanddeliverymodes. The
totalrepresentsthesizeoftheU.S.Information
Servicesmarket.
HowtoGetMoreInformation-Thosereaders
whohaveaninterestinanyofthereports
mentionedabove,shouldcalltheirINPUT
salesmanorcontactthenearestINPUToffice
notedonthebackofthisresearchbulletin.
ThisResearchBulletinisissuedaspartofINPUT'SInformationServicesMarketAnalysisProgram.
Ifyouhavequestionsorcommentsonthisbulletin,pleasecallyourlocalINPUTorganizationor
RobertL.GoodwinatINPUT,1280VillaStreet,MountainView,CA94041-1194,[phone].
©1993byINPUT.Reproductionprohibited. 5
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RESEARCHBULLETIN
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