World Internet Economy to Pass $2.8 Trillion By 2003 - IDC

November 03, 1999: 2:22 p.m. ET

FRAMINGHAM, MASSACHUSETTS, U.S.A. (NB) -- By Steven Bonisteel, Newsbytes. The size of the global Internet economy will exceed $1 trillion by the end of 2001 and reach $2.8 trillion by 2003, International Data Corp. (IDC) said today.
Fueling most of the growth of this Internet economy - which IDC says includes online commerce and the business and technology infrastructures which support it - has been spending on the technology side. IDC says that will change.
IDC's report, "The State of the Internet Economy," says that technology investments accounted for 52 percent of Internet spending worldwide. But the company says that, by the end of this year, non-technology investments will surpass spending on high-tech infrastructure. By 2003, IDC says, technology investments will represent just 39 percent of all Internet economy spending.
"In the early Internet economy years, investments focused around technology products and services to strengthen the infrastructure, achieve critical mass and introduce online users to commerce," IDC senior analyst Anna Giraldo Kerr said. "Now, however, non- technology spending is slowly catching on. The marketing and sales functions, along with content creation, will take a lead role in enhancing the Internet experience and stimulating Internet commerce."
Comparing spending with actual revenues generated by e-commerce projects, IDC found that, collectively, companies were investing 93 cents in infrastructure for every dollar received through online sales.
"Building the infrastructure to support Internet commerce is not cheap," said Frank Gens, senior vice-president of IDC's Internet research. "Everyone praises the benefits of Internet commerce, but few understand the size of the investment required, and fewer still understand that technology infrastructure is just a part of that investment."
Last week, the Center for Research in Electronic Commerce (CREC) at the University of Texas estimated the size of the Internet economy (based on revenues) in the US alone would reach $507 billion this year and already provides jobs for 2.3 million people.

IDC can be found on the Web at: http://www.idc.com