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06/14/2006

IDC Digs Under Covers of U.S. Industry to Identify Key Opportunities for IT in the Securities and Investment Services and Government Sectors

FRAMINGHAM, MA – JUNE 14, 2006 – In a first of a kind study, IDC conducted a comprehensive two-part analysis on the overall structure and critical business initiatives within 17 U.S. vertical markets in order to quantify potential for IT investment by industry. According to the study's findings, industries representing the best combination of business strength and demand for IT include securities and investment services, government, banking, and professional services.

While an industry's size, structure, and dynamics were found to contribute most to the overall state of its business environment and long-term health, the IT requirements for each were determined primarily by industry-specific business initiatives. Together, these two variables generate the demand for IT adoption within the vertical sectors.

The IDC studies are designed to help IT vendors make strategic decisions regarding vertical markets by evaluating which industries are poised to offer the best long-term investment areas for a company. "When conducting industry opportunity analysis, IT vendors tend to focus solely on the IT budgets," explained Meredith Whalen, group vice president and general manager, Vertical Market Business Units. "This can lead to frequent industry portfolio adjustments as vendors chase the industries with the fastest growing IT budgets. Recognizing that targeting an industry is a significant investment, we designed the studies to dig beneath the reported IT budget to understand what industries are the best long-term investment areas."

The securities and investment services industry is one such industry that should have overall appeal to IT vendors. Technology is critical to this industry as there is pressure to deploy new and unproven solutions that offer the possibility of a competitive advantage. One industry driver spawning demand for new technologies within the sector is the need for hedge fund automation and integration. Most hedge funds are relatively unsophisticated in their use of trading technologies which provides hardware, software, services, and telecommunications companies with an untapped market opportunity.

While the government's revenue growth is evaluated as only moderate based on government budget growth, the industry proves to be rife with opportunity for IT. In addition to ranking highest in industry size, structure, and the IT requirements categories, the federal government currently has a number of business initiatives on it's plate that necessitate the use of IT. A few of these include interest in developing and utilizing open sourced applications as well as taking better advantage of scalability in federal government purchasing, which is expected to produce a rise in software spending in the short term.

Although some of the most attractive industries have been highlighted above, Whalen emphasizes that "IT vendors should target industries with critical business initiatives that are addressed by their technology. An industry appearing to be small and seemingly 'unattractive' at first, could actually demonstrate perfect alignment for an IT vendor's solution based on its top industry pain points."

IDC's study, Industry 360: Aligning Business Outlook with IT Opportunities (IDC #35047), provides a comprehensive set of industry profiles for 17 separate industries. Individual industry analysis is also shown in the aggregate to demonstrate how the business outlook and IT opportunities differ by industry. Analysis is based on a series of key industry performance criteria that together account for an industry's size, structure, dynamics, IT requirements, and IT intensity levels. The companion report, Top Critical Business Initiatives for Industry and How they are Driving IT Investments (IDC #201703), takes the industry profiles a step further by providing qualitative analysis of critical business initiatives for each industry.

To purchase this document, call IDC's Sales hotline at 508-988-7988 or email sales@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a division of IDG, the world's leading technology media, research, and events company. Additional information can be found at http://www.idc.com.

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