Competition and Pricing Issues Dominate The IT Industry.LONDON--(BUSINESS WIRE)--Dec. 3, 1996--According to a report by international marketing consultant Frost & Sullivan, the European market for Information Technology (IT), valued at US$177.40 billion in 1995, is expected to show strong growth in coming years. Frost & Sullivan's research projection expects the European IT market, comprising computer hardware, computer hardware peripheral and add-on equipment, computer software and services, to reach US$261.06 billion by the end of the study period, the year 2002. The IT market is dominated by the services sector, accounting for 36.5 percent of the overall market in 1995. Ranking second is the market for hardware, worth 33 percent in the same year, followed by the software market, representing 20 percent of the overall IT market. Germany is the leading national market in terms of revenues with a 28.2 percent share in 1995, followed by France and the UK, valued at 16.7 percent and 16.2 percent, respectively. Frost & Sullivan's new report, profiling key suppliers to the IT industry, identifies Compaq, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Apple, NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. and Packard-Bell as the leading companies with the highest market shares in terms of revenues. The report states that IT developers and manufacturers will have to face decreasing prices and growing competition where cost-effective procedures and customer satisfaction will determine business success. Successful competitors will need to be aware of end-user requirements and be active in consistently developing new applications. Maria McFaul, research manager at Frost & Sullivan, comments: "The recent world-wide recession has affected the revenue growth rate of almost all IT manufacturers and has increased competition considerably. "Although most companies have recovered from recession and look forward to growth in the coming years, it is to be expected that competition will intensify further in the European IT market." Mrs. McFaul continues: "In the coming years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time emerging markets for IT products and services will be created in the Central and Eastern European countries. These markets are largely under-developed and untapped. However, there will be increasing competition in the IT market largely from local companies." IT technology is advancing at high speed. A number of promising technologies are being developed that will probable have significant impact in the IT industry. Research activities range from those aimed at meeting well-defined end-user needs to long-term research. Strategic alliances, mergers and acquisitions, and joint ventures are prominent in the IT industry. In recent years, a considerable number of acquisitions and mergers of IT companies has been witnessed. Present concerns of the IT companies lie in the cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. strategies associated with owning and operating computer hardware. The combination of the computer industry and the communication industry seems more likely in the future with several communications companies forging alliances with computer and software companies. Future challenges will dictate resources from both industries to form supergroups capable of solving immense technical and technological problems. Frost & Sullivan concludes: "The major competitive facts in the European IT industry are product innovation, pricing and client and end-user satisfaction." Product innovation is the key to the success of IT industry players. With increasing competition from Far East suppliers, the correct timing of the product development and innovation strategy is crucial to the wide acceptance of the product. This is particularly applicable to software companies which face a bigger problem in piracy and illegal copies being readily available. Piracy of software packages is still observed at variable unacceptable levels in European countries. Companies participating in this market include: Acer Computer Europe BV, Advanced Micro Devices (AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. ) SA, Amdahl International Management Services Ltd, Amstrad Plc, Apple Computer Europe, AST (AST Computer, Irvine, CA) A PC manufacturer founded in 1980 by Albert Wong, Safi Quershey and Tom Yuen (A, S and T). It offered a complete line of PCs that sold through its dealer channel. Europe Ltd, Borland Europe, Brother International Europe, Canon Europa NV, Cap Gemini Sogeti (CGS CGS centimeter-gram-second system. CGS or cgs abbr. centimeter-gram-second system. CGS, c.g.s. ) SA, Compagnie des Machines Bull, Compaq Computer Europe GmbH, Comparex Informationssystems GmbH, Computer Associates Italy SpA, Conner Peripherals Conner Peripherals was a company that manufactured hard drives for personal computers. Conner Peripherals was founded in 1986 by Seagate Technology co-founder Finis Conner, as a merger between a company of his and another started by MiniScribe founders John Squires and Terry United Kingdom Sales Ltd, Cray Research (UK) Ltd, Data General Europe, Dell Computer, Digital Equipment Corporation International (Europe), Electronic Data Systems (EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. ) Europe, Elonex Plc, Fujitsu Printer Products Europe, Gateway 2000 Europe, Hewlett-Packard Europe SA, Hitachi Europe Ltd, IBM Europe, ICL (International Computers Ltd., London) The former name of Fujitsu Services, the European-centered arm of the global Fujitsu Group and one of the leading IT services companies in Europe, the Middle East and Africa. plc, Intel Corporation, Intergraph Group, Microsoft Europe, Motorola Corporation SA, NCR (NCR Corporation, Dayton, OH, www.ncr.com) A technology company specializing in financial terminal transactions, retail systems and data warehousing. Until the late 1990s, NCR was heavily invested in the hardware side of the industry, known worldwide as a major manufacturer of computers Europe, NEC Electronics (UK) Ltd, Olivetti SpA, Oracle Corporation Ltd, Packard-Bell Europe BV, Quantum Peripherals (Europe) SA, Samsung Electronics Europe, Seagate Technology, Sema Group, SNI (1) (Subscriber Network Interface) The point of interface between the customer's equipment (CPE) and a communications service from a common carrier. (2) (SNA Network I (Siemens Nixdorf Informationssysteme Siemens Nixdorf Informationssysteme, AG (SNI) was formed in the mid 1990s by the merger of Nixdorf Computer AG and the Siemens' Data Information Services (DIS) division. ) AG, Sun Microsystems (UK) Ltd, Tandem Computers Europe Inc, Tektronix Europe GmbH, Texas Instruments Europe, Toshiba Corporation- European Office, Tulip Computers, Unisys Europe-Africa Division, Vobis Microcomputer AG, and Zenith Data Systems Zenith Data Systems (ZDS) was a division of Zenith founded in 1979 after Zenith acquired Heathkit, who had, at that time, recently entered the personal computer market. Zenith sold personal computers under both the Heath/Zenith and Zenith Data Systems names. (ZDS ZDS Zenith Data Systems ZDS Zonal Distribution System ZDS Zero Degree Stat ZDS Zinc Detection System ZDS Zonal Drying System (aircraft de-humidifier) ). Frost & Sullivan is an international marketing consulting company that monitors the information technology industry for market trends, market measurements, and strategies. This ongoing research is utilized to update a series of research publications and to support industry participants with customized consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press. Report No.: 3197-78 Publish date: June 1996 Price: $1995 For information in the United States, please contact: Kimberly Barney California 415.961.9000 ext. 233 415.961.5042 fax kbarney@frost.com or, visit our web site: http://www.frost.com For all other inquiries, please contact: Kristina Menzefricke Stefan Gerhardt London Frankfurt 44.171.730.3438 49.69.235057 44.171.730.3343 49.69.234566 CONTACT: Frost & Sullivan Kimberly Barney, 415/961-9000 ext. 233 kbarney@frost.com or Kristina Menzefricke, 44.171.730.3438 (London) or Stefan Gerhardt, 49.69.235057 (Frankfurt) |
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