E-commerce to total $333 billion by
2002
By Jeanette Borzo
InfoWorld Electric
Posted at 8:48 AM PT, May 11, 1998
MONTE CARLO, Monaco -- While $8 billion worth of business was transacted on the
Internet in 1997, that figure will grow to $333 billion by 2002, according to International
Data Corp.'s eCommerce Forum, being held here.
By 2002, Web-based transactions will account for about 1 percent of the global economy,
said Frank Gens, senior vice president of IDC.
"There will be a massive growth of business transacted on the Web, about a 40-fold
increase over the next five years worldwide," with a 50-fold increase expected in Europe
during that time, Gens said.
Increasing numbers of World Wide Web users are fueling the growth. At the end of last
year, there were more than 80 million users of the Web around the globe, but that figure will
grow to 1 billion by 2008, said Roberto Masiero, president of IDC Europe.
"There will be faster growth in Europe," said Gens, noting that of the 329 million Internet
users expected by 2002, some 80 million will be based in Europe. "The more users, the
more spending on information technology there will be," he added, pointing out that while
some $700 billion was spent globally on information technology last year, that will grow to
$5 trillion by 2010.
While IT companies are expected to receive the most immediate benefit in the growth of
electronic commerce, the growth of e-commerce will in turn radically change their businesses
-- by causing changes in the devices used to access the Web, the average speed at which
the Web is accessed, and the software used to access the Web.
For example, fewer PCs will be sold in the future but more Internet-access and
information-appliance products will be sold, Gens said. Also, software that runs those
devices may come from an unexpected vendor -- it's too early to say who will dominate that
segment of the market, he noted.
"Forty-two percent of all Web access devices shipped in the U.S. in 2001 will be non-PC,
information appliances," Gens said, noting that the figure will rise from 1997's figure of only 4
percent. In Europe, 25 percent to 30 percent of the IT devices bought by 2001 will be
information appliances, rather than full-fledged PCs, he added.
While many have said a lack of available bandwidth will limit the growth of the Web and
e-commerce, Gens predicted a great increase in Web-access bandwidth that in turn will let
e-commerce grow.
"Plan to see a future where there is an easing of the bandwidth crisis," Gens said, predicting
that nearly 20 percent of all U.S. households will have some form of high-speed access to
the Web by 2002. Today, he noted, only 1 percent of those households have high-speed
access.
All this change will require new business practices, Gens concluded.
"This is a very important time to take bold moves that will set you up for the long run," he
said, explaining that companies may need to take a loss on new technologies in the short
term in order to secure a leadership position in e-commerce for the long term.
International Data Corp. is based in Framingham, Mass., and can be reached at
idcresearch.it.
Jeanette Borzo is Paris bureau chief for the IDG News Service, an InfoWorld affiliate.
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Please direct your comments to InfoWorld Boston Bureau Chief, Ted Smalley Bowen
Copyright c 1998 InfoWorld Media Group Inc.
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