IRELAND'S market for information technology could grow by almost 7 per cent this year, according to the International Data Corporation's latest survey.
But the growth rate of PC sales across Europe is slowing significantly, according to another new report by analysts at Context.
The IDC report, Information Technology Trends & Expenditure in Ireland 1996, predicts that the information technology (IT) market here will have a compound annual growth rate of 5 per cent over the next four years.
"In the short to medium term much of this growth will still be driven by the hardware sectors," says Alison McKenzie, IDC's senior research analyst. "However, severe price erosion is expected to continue and will offset the higher shipment growth rates, as will be the case across Europe."
The survey does not come cheap copies cost £2,850. It shows that companies in Ireland are clearly increasing their usage of the Net. A fifth now have either a Web server or a home page, or are planning to have one by the end of next year. Fifty five per cent "intend to use the Internet" this year.
The results are based on replies by more than 260 IT directors in small, medium and large businesses in Ireland. Among the survey's other findings:
. 41 per cent say they are about to increase their spending on PC servers;
. 45 per cent plan to increase investment in PCs and workstations;
. just over a fifth plan to increase investment on minicomputer systems;
. 34 per cent have moved towards using client/server architecture or plan to adopt it by the end of the year; but
. over half the sample say they have no plans to do so or are unsure.
"The survey results also reflect that the role of IT alone in providing a significant advantage is falling," Ms McKenzie says, "illustrating the fact that IT and communications are becoming commodities, and that [it] is the applications which are providing the differentiators. The finance sector was the first industry to recognise this, and now other sectors are considering these strategies."
Europe growth down
Meanwhile, the growth in sales of PCs in Europe slowed further in the second quarter of this year, held back by Germany's dull performance. Last month German computer retailer Escom filed for bankruptcy, engulfed by a fierce price war and after enormously overstretching its chain of British retail outlets.
Research company Context said last week that buyers would be in an increasingly strong position in the months ahead as manufacturers and retailers scramble for sales. Or if prices do not drop, consumers can expect more computer power for the same money.
PC sales in Europe in the three months ended June 30th were 10.4 per cent above their level a year earlier at 3,580,040. This compares with a growth rate of 13.2 per cent in the first quarter, 22 per cent in the fourth quarter of 1995 and 26 per cent for all of last year.
Sales in Germany rose 5.9 per cent to 835,000, compared with the same period last year. Sales in Britain, the number two market, jumped 18.4 per cent to 741,000, while sales in the Netherlands rose 26.2 per cent to 271,000.
Context's senior partner Jeremy Davies said a recent trend was the success of direct sales companies such as Gateway 2000, whose European operations are based in Ireland, and Dell. Gateway announced last week that it shipped about 424,000 units in its most recent financial quarter - up 48 per cent on the same period in 1995.
Davies also reckoned "some of the smaller brands" were going to suffer, particularly companies with less than 5 per cent of the market.