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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.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
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.