Gartner Group: European CIOs are Bullish About M-Commerce but Will Not Pay Extra for 3G.

Business/Technology Editors

LONDON--(BUSINESS WIRE)--Feb. 22, 2001

Only 24% of European CIOs Are Prepared to Pay a Premium

for 3G Data, a New Gartner Survey Reveals at its Annual

Internet and Electronic Business Europe Conference

According to new research revealed today by Gartner Group Inc. (NYSE: IT and ITB), 82% of organisations across its European customer base see mobile devices and applications as very important to their business, and expect their organisation's use to increase substantially over the next three years. However, this enthusiasm for mobile business does not translate to their purse strings, with only 24% prepared to pay an increase for 3G rates.

"This is bad news for European 3G mobile operators who have paid high premiums for licenses," says Nick Jones, Research Director for Gartner's Mobile Applications Group, who presented the survey results at Gartner's annual Internet and Electronic Business Europe conference. "While European CIOs would like the high data rates promised by 3G systems, they are not willing to pay extra for them."

The majority of organisations surveyed do recognise the wide range of benefits that mobile business applications are expected to bring, including improved customer satisfaction (66%), cost savings (60%), and new business opportunities (57%). But they remain unconvinced that upgrading to 3G will bring benefits that justify the investment.

The top three inhibitors of mobile investment that still remain for European CIOs:

- 76% are concerned about mobile security and privacy, especially fragile
encryption keys increasing the risk of outside interception

- 52% are concerned by the support costs of mobile devices, specifically the
total cost of ownership of supporting and servicing PDAs

- 39% are concerned about the magnitude of mobile phone bills

"There is a positive outlook on m-business opportunities, but companies are aware that the technology does not guarantee success. What really matters is if the technology provides a service that corporate users want and need. European organisations want to make sure their employees are enhancing their business effectiveness, in return for an investment they can afford," Jones adds.

However, enterprises must strike a careful balance between prudent spending and staying competitive. "We expect that by 2003 every e-business initiative will have some element delivered across a mobile channel, and when m-business takes off a significant minority of organisations risk being left behind" Jones warns. "It is disconcerting that 21% of our respondents believe their board of directors do not understand m-business. It is vital for CIOs to make sure the top level understands the importance of mobile devices, and provide the means to take advantage of them."

About Gartner

Gartner provides unrivalled thought leadership for more than 10,000 organisations, helping clients to achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximise technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit, Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and, at www.gartner.com. Gartner subsidiary TechRepublic, Inc. (www.techrepublic.com) is the leading online destination developed exclusively for IT professionals by IT professionals. Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 2000 revenues of $859 million. Gartner's 4,300 associates, including 1,400 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's industry-leading products and services, please visit us on the Web at www.gartner.com.

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