Analysts outline IT opportunities for 2002

TORONTO — Chris Ferneyhough knows there are millions of people surfing the Web for porn and gambling away their paychecks, but only two per cent of them in Canada admit it.

“Every time you work on a study there’s at least half a dozen head-shakes,” according to the vice-president of technology research at Ipsos-Reid. To underscore the point, he offered a slide that asks the question “Have you ever been surveyed?” in which nine per cent say they’re not sure. It’s a joke, but it’s there to make a point. “There are a lot of stupid people out there.”

The inconsistency of responses and lack of honesty make it difficult for research firms to make predictions, particularly in complex fields like information technology. But at a Smart Toronto-hosted forum Monday, key executives from Ipsos-Reid, IDC Canada and Jupiter Media Metrix tried to weed through their data and offer a glimpse at the industry’s short-term future.

Vito Mabrucco, IDC Canada’s group vice-president of products and services research, said that the challenge was compounded this year by the terrorist attacks on the United States on Sept. 11., which caused IDC and several other analyst companies to revise their IT spending forecasts. Mabrucco said that while Canada’s IT growth this year will fall to 3.5 per cent compared to 7.5 per cent in 2000, we have fared much better than the U.S.

“The dot-com thing wasn’t as big here, so we didn’t have that gravy,” he said. “But now we also don’t see as much of a decline.”

Mabrucco predicted a turnaround in market conditions by the second half of next year, and outlined six key trends as major opportunities for the technology companies in the audience. These included growth in wireless, xSPs and Web services.

Though Web services were a major theme at this year’s Comdex Fall in Las Vegas, Mabrucco said it was important to come up with a proper definition of the term. IDC sees Web services as the ability of an application to communicate to any other component for which it is authorized, regardless of its originator, location, the manner in which it was produced or the platform on which it is running. Microsoft’s Passport is a good example of such a service, he added.

“The Internet is fun, it’s been a great ride, but it’s a mess,” he said. “This is going to be similar to the hardware industry, where we moved from an era where people manufactured everything to where companies specialized in creating all the different components.”

Web services may be necessary to drive the next era of e-commerce, but Ferneyhough warned that the number of Canadian Internet users that would take advantage of them is leveling off. According to Ipsos-Reid data, only about one in five Canadians who have not purchased online before expect to do so within the next year. “It’s great for those who have tried it already,” he said, “but we’re still struggling to get it in the mainstream.”

The good news, Jupiter Media Metrix Canada president Brent Lowe-Bernie said, is that the gender gap among Canadian Internet users is closing. According to the firm’s data on English Canada, 51 per cent of the country’s Web surfers are male. In Quebec, however, 55 per cent are male. He attributed the larger gap to a lack of content for women and higher costs.

Although 91 per cent of those who use the Web say they use it to check e-mail, there are many other killer applications that will take greater hold in 2002, Lowe-Bernie said. “These digital media applications, not just e-mail but Messenger, ICQ and chat, they’re getting a lot of play,” he said. Jupiter Media Metrix is finishing a study of commercial users, which Low-Bernie said was showing increased use of messaging apps during board meetings or during other tasks. “You’ll be surprised to find out what people are doing at work,” he said.

Businesses may be disappointed by the results of their e-commerce and Web strategies, Lowe-Bernie said, because they apply poor metrics. While 47 per cent told Jupiter Media Metrix they believe customers come to a store after researching product information online versus 32 per cent who end up placing orders over the Web, 43 per cent also use sales as the key measure of their portal’s success.

Some of these attitudes may change as the retailers and other customers change they way they pay for services over the Web, Mabrucco said. He said xSPs — service providers that externally manage services over a network in a one-to-many approach — will play a large role in the delivery of e-commerce functions. The application service provider (ASP) model, for example, has a five-year return on investment according to IDC, and Mabrucco said customers are seeing payback in 1.3 years. Human resources, collaborative software and supply chain management will all be offered by xSPs in the year ahead.

The increase of applications running over the Internet does not necessarily change the outlook for the hardware market, the analysts added. Though Mabrucco predicted major growth for wireless firms as bandwidth becomes available, Ferneyhough said some wireless devices, like personal digital assistants, have stalled at about eight per cent of the Canadian market.

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