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IDC: Services demand boosts revenues 14%

Increasing demand for computer services worldwide drives revenues in the worldwide software support market up 14 percent to nearly $22 billion.

Increasing demand for computer services worldwide drove revenues in the worldwide software support market up 14 percent to nearly $22 billion last year, according to International Data Corporation.

Market growth is expected to hold at about 14 percent, nearly doubling to $42 billion in 2003, according to Framingham, Massachusetts-based International Data Corporation. The U.S. software support market accounts for about $10 billion of overall software support sales, with Western Europe the runner-up, spending $7 billion.

"Support is becoming a key attribute to developing stronger customer loyalty," said IDC analyst Barrett Coakley.

And while the telephone may still be the customers' support method of choice, Web self-service applications are coming on strong.

"Traditional phone support used to be the first line of defense, but now vendors are adding more self-service options for more timely support," Coakley said.

Last year, telephone support services represented about $13 billion, or about 60 percent, of all software services revenues. However, IDC expects telephone use to decline as more businesses and consumers turn to the Web for help. As a result, telephone support is expected to decline to 44 percent of software support revenues by 2003.

Overall, U.S. spending in this market is expected to more than double and reach $20 billion by 2003, IDC reports. The firm's study examined software support spending by businesses on applications, application development tools, and systems software, as well as consumer spending on support.