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01/26/2006

Packaged software will drive IT spending for Western European CPG companies, says IDC

MILAN – JANUARY 26, 2006 – According to a recently published study by IDC's European Vertical Markets group, overall IT spending in the consumer packaged goods (CPG) industry (including both manufacturing and retail) will reach approximately $13.5 billion in 2005 in Western Europe. IDC foresees a CAGR over the 2005-2009 forecast period of 5%, reaching a market value of nearly $16.5 billion by 2009.

Highlights of IDC's IT spending forecasts in the CPG industry include: — Packaged software is expected to drive growth over the forecast

period, and it will witness the fastest growth rates, with a 2004-2009 CAGR of 5.9% for CPG manufacturers and 6.1% for CPG retail distributors in Western Europe.

— In the IT services space, IDC sees particular opportunities for industry-specific software applications and IT outsourcing.

— IDC expects a 2004-2009 CAGR of 2.1% in hardware spending for Western European CPG manufacturers and a CAGR of 2.4% for Western European retail distributors, with the value of the CPG market expected to reach close to $4 billion by 2009.

"Driving down the cost of computing will be a key goal, and dynamic computing strategies will become more evident as companies strive to simplify the system landscape and reduce the overheads required to manage complex IT environments," said Jennifer Thomson, program manager, Vertical Markets, IDC. "The need for large food and beverage and personal care and homecare organizations to cost-effectively manage and secure the growing amounts of data in the industry will drive the outsourcing of key IT activities."

The IDC study, Western Europe, Consumer Packaged Goods, IT Spending Forecast Update, 2004-2009 (Doc #CM53M, December 2005), provides an update of IT spending trends and forecasts in the Western European CPG industry released in June 2005 (Doc #CM01M). The focus is on spending in hardware, packaged software, and IT services for the major Western European countries (Germany, France, the U.K., Italy, and Spain), and for total Western Europe in the 2004-2009 timeframe.

To purchase the study, please contact your local IDC office or visit www.idc.com .

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com .

IDC is a division of IDG, the world's leading IT media, research and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.

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