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IDC U.S. Services Forecast Finds Significant Growth Opportunities Among Small and Medium-Sized Businesses

FRAMINGHAM, Mass., June 21, 2004 In its first forecast of the U.S. services market by company size, IDC found that spending on outsourcing of both business processes and IT will grow significantly faster than spending on project services such as consulting. And within both of these markets, the "sweet spot" for long-term growth will be medium-sized companies in the 100-999 employee range that are taking advantage of the greater capabilities and lower prices of information technology and the services needed to integrate IT further into their business processes. Over the next five years, IDC forecasts a 7% compound annual growth rate (CAGR) for the U.S. services market. based business free home
"Although it is a relatively small portion of the overall services market currently, the small and medium-sized businesses (SMB) segment represents a significant opportunity for services companies. They are concerned with many of the same issues of security, availability, and leveragability of IT as are large companies, where lessons learned from these engagements can be applied in a templated fashion. Service vendors should seek to build more direct relationships with SMBs for the time when capabilities such as utility computing and services-oriented architectures reach this segment," said Rebecca Segal, vice president, Worldwide Services and Midtier IT Services Provider Strategies research at IDC.

This demonstrates the rapid growth of the technology among small firms, with less than three per cent using a broadband ADSL connection just four years ago. "Advances in technology have clearly helped small businesses make the most of the opportunities available to them around the world, " remarked Pete Ferns, director of NatWest Business Banking. "In the last 20 years, we have seen the growth of computer usage, all of which give small firms another helping hand to make their business a success."

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Small businesses could make significant savings by changing to pay for their water by meter, according to advice from the Consumer Council for Water.

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Additional key findings from this study include:

" based selling programs during the second quarter has positively impacted revenue and has reduced marketing and customer support costs, " said Stamps.com Chairman and CEO John Payne. "In the Small Business unit, our Internet Postage™ service has attracted large volume mail users, many of whom use the service primarily to ship Express and Priority Mail packages, resulting in more revenue per small business customer to Stamps.com. Commerce business units are well positioned for continued growth with the recent launch of the Enterprise unit's iShip™ Commerce unit's iReturn™ services. In bringing Internet mailing and shipping services to businesses of all sizes and industries, we have solid growth opportunities."

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"Small businesses generate over half of UK GDP [gross domestic product] and many of them rely on the post office for a variety of services, " he added. An FSB survey found that 82 per cent of small businessowners thought that the closures would have a "significant impact" on their business. Duport Associates Ltd 2006 hsbc electron maestro mastercard solo visa Terms Of Use Privacy Site Map

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* Spending by SMBs (companies with fewer than 1,000 employees) will account for 26% of total services spending by 2008.

"Our phenomenal growth in the past few years has shown the important role email marketing plays in the growth and success of thousands of small businesses and organizations across the U.S., " said Gail Goodman, CEO of Constant Contact. "While we have been operating cash flow positive for the past two years, this additional capital provides us a tremendous opportunity to gain significant market share and expand our reach, given the readiness of the small business market."

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* A smaller percentage of SMBs buy IT and business services currently (as compared with large businesses), but that percentage is set to increase dramatically. business federal opportunity
* Spending by very large businesses (companies with more than 10,000 employees) will decrease to 43% of the market in 2008. based business home legitimate
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IDC's new study, United States Services Market 2003-2008 Forecast and Analysis: Opportunities by Company Size (IDC #31370), presents a five year forecast of the U.S. services market and identifies recent trends that are influencing the U.S. services opportunities and compares the services opportunities of project-based services, outsourcing services, and support services across companies of various sizes. business home idea internet

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