*NEWS*U.S. IT SPENDING ,416BN IN 2005

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Date: Saturday April 23, 2005 11:08:00 am
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    U.S. IT Spending Will Increase to $416
    Billion in 2005 and Reach $497 Billion by 2008, IDC Reveals

    FRAMINGHAM, Mass April, 2005
    U.S. IT spending will
    increase to $417 billion in 2005 and reach $497 billion by 2008, a new report
    published by IDC reveals. According to this new study, government,
    manufacturing, and banking continue to drive IT spending in process management
    and content management.

    According to Anne Songtao Lu, program manager for IDC’s Worldwide Vertical
    Markets research service, the consumer/home vertical has become increasingly
    important for IT vendors. “We expect the share of this vertical’s spending
    on software to increase from 10.5% in 2004 to 13.5% in 2008,”
    said Ms. Lu.
    “Its share of spending in the personal computers and peripherals and storage
    markets is expected to reach 35% and 29%, respectively, driven mainly by the
    proliferation of wireless and digital technologies.”

    Among the key findings presented in this study are the following:

       —  Driven by compliance and increasing data transfers, the
    need
            for content management is looming in industries such
    as
            healthcare, banking, insurance, media, and government.

       —  eCommerce is emerging across vertical markets.

       —  Mobility has become a must-have function for IT technology.
           
    IDC sees this trend in the manufacturing, banking, healthcare,
            and
    education markets.

       —  Creating consistent technology platforms across the board
    is
            gaining momentum in manufacturing and capital markets.

       —  Reducing cost is still a top business strategy. Industries
    use
            different ways to reduce cost. The fourth quarter of 2004
    saw
            a lot of IS outsourcing deals within manufacturing,
           
    healthcare, government, and communications, suggesting
            companies are
    still in the cost-control mood.

    IDC believes that vendors should position themselves to provide consistent
    and simplified solutions for end users and should supply solutions to increase
    process capabilities, especially for banking and capital markets, where their
    business relies heavily on the speed and accuracy of processing capabilities. In
    addition, the selling points of vendors should focus on effectiveness,
    efficiency, and the ability to close the gap between different business
    functions

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