But the shake-up will continue for IT vendors, with consolidation eliminating more than half the companies from the competitive scene by 2005, Gartner said at its Tech Investor Summit in New York, which concludes on Wednesday. A side-effect of consolidation will be that the rock-bottom prices that buyers have enjoyed of late are likely to disappear, analysts said.
Industry observers have recently been expressing cautious optimism about the prospects for the recovery of the IT sector, although they say much depends upon wider economic recovery in the US and elsewhere. Gartner last week raised its estimates for 2003 PC shipments, saying it now expects worldwide PC shipments to reach 164.3 million units for the year, which is a 10.9 percent increase from the previous year's numbers. Earlier this year, Gartner said shipments would increase to 161.3 million units, an 8.3 increase from 2002. IDC, which last revised its 2003 unit shipment forecast to 148.2 million units in September, is also expected to raise its forecast later this year.
Outside the PC industry, prospects for sales increases are improving, and spending has bottomed out, Gartner said. "We are now seeing a true recovery in the making," said Al Lill, Gartner group vice president, in a statement. "There is a key combination of technology advances, architectural changes, market forces and best practices in place to lead a good recovery for IT in the near future and culminating in very strong growth in the longer term." The next two years will see a minimum of strong single-digit growth over this year's levels.
The current trend of consolidation will continue, leaving the IT industry in the hands of a few powerful players in the next two years, Gartner said. These players will regain their pricing power, after a period in which companies have been forced to slash prices to drive sales. In the PC industry, low prices have fuelled a boom in mobile products such as laptops and wireless equipment.
For tech workers, the recovery will mean a tremendous skills shift possibly affecting millions of people, Gartner predicted. The most valuable skills will include broadband, wireless, Linux, content management, data mining, security and business intelligence.
Talkback
Does anyone know what Gartner means by "The most valuable skills will include broadband, wireless...?" What is a broadband or wireless skill? The infrastructure and technology required to build these based services is controlled by a very few players and is already very far down the pipe. Most IT staff would only be involved in implementation; but this cannot be what they mean.
Being able to plug in cables and secure the connection does not seem like a brisk driver of business growth. This is the equivalent of saying “The most valuable skills for business will include making money, staying in business…” It doesn’t say anything.
I agree that the economy in general is on the right track. I also agree that IT is beginning to present some compelling new opportunities for business – especially in the last five items on Gartner’s skill list. I am just trying to get a better picture of what IT Workers will be doing in Gartner’s view of future.