Gregory, I get this on a news service so don't have a link. Found it interesting and I think it fits with your post.
NW
Subj: IDC's Predictions '98: New Internet Power Brokers Will...
Date: 97-12-18 08:08:33 EST
IDC's Predictions '98: New Internet Power Brokers Will Challenge Intel, Microsoft, and PC Suppliers
Consumers, Nascent Appliance Market Will Rock the IT Industry, Frank Gens Predicts
FRAMINGHAM, Mass., Dec. 18 /PRNewswire/ -- In 1998, International Data Corporation (IDC) predicts the Web population will reach near 100 million and the Web's killer application, online commerce, will grow to over $20 billion. However, according to Frank Gens, IDC's senior vice president of Internet research, the real story is that the growth of the Internet is spawning a crop of new "power brokers" - consumers, consumer electronics suppliers, telephone companies, and ISPs -- who will challenge today's market leaders.
"Two years ago, we shocked the market by predicting $800 to $1,000 PCs. Last year, we shocked the market by predicting Intel's embrace of network computers," said Gens. "The success of our predictions has been not to focus on what suppliers say they'll do. We focus on what the market will require them to do." Once again, IDC's third annual Predictions rest solidly on IDC's in-depth research to forecast surprising market and vendor shifts.
Among Gens' most startling predictions for 1998: -- Intel will release a non-Pentium line aimed at the Internet appliance space.
-- Microsoft will launch a non-Windows platform, also focused on appliances.
-- Microsoft Windows will struggle to maintain its position as the de facto standard client platform.
-- DSL (digital subscriber line) will join cable to launch the era of megabit consumer Internet access -- Netscape, Oracle, and Sun are ripe to lead a wave of mega-merger mania.
Mass Market Web Finally Arrives IDC predicts 1998 will mark the arrival of the mass market Web with one in four U.S. households online. The Web will be a critically important 'location' for businesses selling to consumers. In addition, the consumer's wants and needs will reshape major segments of the IT market, notably PCs and semiconductors (see following predictions).
Invasion of the Information Appliances "If you think $999 PCs turned the market on end, see what happens at $199, with the arrival of a wide range of Information Appliances," said Frank Gens. In 1998, the market will see an explosion of new product introductions in the form of TV set-top boxes, Web-enabled TVs, Web-enabled screen phones, Web- enabled video game consoles, Web-enabled Personal Digital Assistants, and more. PC suppliers, chip suppliers (notably Intel), peripherals suppliers, and software suppliers must establish a play in the appliance space or risk marginalization. These suppliers must adapt business models to support much higher volume sales and lower unit costs. "Windows will struggle to maintain its current position as the de facto standard client platform as more appliance-centric operating systems (including JavaOS) compete in this space," said Gens.
$500 to $700 PCs; Death of Business-Centric PC Suppliers In order to get household penetration to the 60-80% level, suppliers must drive PC prices down to the $500-700 level. The first-tier PC suppliers will hit these price points within the next 18 months, IDC predicts. IDC also believes that the long-term survivors in the PC business will establish a stronger presence in key categories of Information Appliances. "The basic shift in 1998 is to a consumer-centric PC business," said Gens. "IDC believes suppliers who do not succeed in the consumer PC segment will no longer be in the PC business three years from now."
Intel Launches Non-Pentium Line In December, Intel announced plans to re-architect the design of the Pentium to support both low-cost PCs and Network Computers/appliances. "The new Pentium will be an excellent offering in the low-end PC space, but IDC believes it will not make it in the appliance market, where chips are priced at $10 to $20 or less. Intel must approach the appliance space with a blank sheet of paper," said Gens. In 1998, Intel will surprise the market by announcing a non-Pentium product line aimed specifically at the low-cost, high-performance appliance space, IDC predicts.
Microsoft Beats the DOJ; Launches Non-Windows Operating System IDC predicts the temporary injunction against Microsoft will be very temporary, because users do want browser capability included as a base function within their systems. In the meantime, Microsoft's battle to bundle more function into the operating environment may make it more difficult for the company to compete effectively in the Information Appliance business because success in this market will be based on thin software designed for appliances. "Our 'out-on-a-limb' prediction for 1998 is that Microsoft will rethink its appliance strategy, and launch a new non-Windows platform focused on this new class of devices," said Gens.
Era of Megabit Consumer Internet Access Begins (Hello DSL, Goodbye ISDN) In 1998, telephone companies will get a second chance to challenge the cable companies in high-speed consumer Internet access. IDC predicts that digital subscriber line (DSL) will have successful, widespread U.S. trials in 1998 and begin rapid adoption in 1999. By 2002, almost 15% of the 45-50 million U.S. households online will have Internet access at megabit speeds - with DSL and cable dominating the market. Goodbye ISDN.
ISPs Grab Power as Key Customers IDC believes that in 1998, there will be a shift of market power to ISPs. By 2000, ISPs will account for 51% of all WAN equipment spending, up from 36% in 1996. IDC predicts similar shifts will occur in server, software, and other IT segments. As a result, there will a surprising resurgence of market underdogs who uniquely support ISPs' large-scale requirements, notably Unix (vs. Windows NT), and Netscape (vs. Microsoft). "The ISP market will be a central battleground for server and software market share -- just as it is a make-or-break space for network equipment suppliers like Cisco, 3Com, Bay Networks, and Ascend," continued Gens.
Next-Generation Web Technologies Take Hold In 1998, the key technologies and products that will support the growth of the Web include: Digital Certificates: In 1998, digital certificates will begin to catch fire, with the certificate authority business growing from about $130 billion in 1996 to an over $2 billion business by 2000.
Thin (appliance-focused) software: Software that wants to find a home on the hundreds of millions of appliances will need to be "thin" -- supporting deep functionality in a narrow application, or "80:20" functionality in broad application spaces. Lotus' eSuite is an early example of the latter.
Web Sound: Sound will be happening in a big way on the Web in 1998. Streaming audio is already becoming commonplace on commercial Web sites. But in 1998, users will also begin to access voice, e-mail, scheduling, and even tap knowledge bases or new sites on the Web via voice-based user interfaces.
Web Language Translation: The 42% of Web users residing outside of the U.S. represent the fastest-growing part of the Web population. IDC predicts that in 1998, products and services that support translation of Web content will become critical tools for the Web community.
Mega-Merger Mania In a recent IDC survey of 11,000 IS executives, almost 60% could not name a single vendor they considered most important in helping them exploit the Web. Mind share - a leading indicator of market share - is largely unclaimed as the market is still in the early years. "In 1998, the desire to capture this unclaimed mind share will drive a large number of mega-mergers. Two likely candidates are Netscape and Oracle, who both need each other to defeat Microsoft; and Sun, who will seek a major enterprise computing supplier to boost its mind share among IS executives."
To view a full copy of IDC Predictions '98: New Power Brokers Reshape the IT Industry, go to IDC's Web site at www.idc.com. For additional information about IDC's Internet research services, contact Beth Freedman at 508-935-4764 or at bfreedman@idcresearch.com.
About IDC Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 300 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.
IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.
IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases and offers full-text searching of recent research.
IDC is owned by International Data Group (IDG), the world's leading IT media and research company.
All product and company names may be trademarks or registered trademarks of their respective holders.
CO: International Data Corporation
ST: Massachusetts
IN: CPR MLM
SU: |
