Hardware support market slowing

Hardware support market slowing

BOSTON - A move away from large systems to smaller, more powerful systems means the hardware support market will continue to decline for the foreseeable future, but it will remain formidable, according to a new report by International Data Corporation.

According to the report, 1997 Worldwide System Support Markets and Trends, the hardware support market in the US will see a decline in the compound annual growth rate of minus 2.8 per cent between 1996 and 2001, while the worldwide market rate will be minus 1.7 per cent for the same period. Europe will see an even larger decline of minus 4.3 per cent.

"The largest single factor is the move from large systems to smaller, more powerful systems, PC LAN-based environments, especially in the US and that class of systems doesn't make up for the shortfall in the larger systems," said Doug Chandler, senior analyst in IDC's Client/ Server Support and Operational Services research program.

"The contract size for maintenance . . . is not as large for small-scale or PC-server class systems," he added.

Still, Chandler said, spending on hardware support worldwide last year topped $US36 billion, including $US12.9 billion in the US, and will remain above $US30 billion at the turn of the century.

"It's a huge market, worldwide . . . we project it to be $US33 billion by 2001," Chandler said. "So there is still a lot of hardware maintenance going on. But we just don't see it as a growth market."

The IDC report examines the hardware support market by seven different technology segments: servers, workstations, PCs, Internet access devices, storage devices, terminals, and printers.

Servers show a compound annual growth rate of minus 4.6 per cent worldwide, while declines in spending are also forecast for storage devices (minus 3.2 per cent). Printers (minus 1.2 per cent) and terminals (5.2 per cent) also show a decline as a percentage of the total worldwide market, according to the report. For the same period, workstations, PCs, and Internet access devices gain in hardware support spending.

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