Half of tech suppliers will die

Up to 50 percent of technology suppliers will be eliminated from the competitive landscape by the end of 2005, as job losses and vendor consolidation continues, according to research conducted by Gartner.

The market analyst's latest report 'Top Trends for Asia-Pacific in 2004' argued the days of 'the customer is king' will shortly end as market forces crush the weaker players.

'What is today a buyer's market for IT products is likely to turn into a seller's market within the next year. Most IT sectors will be dominated by a few large vendors that will not be governed by cut-throat pricing,' Gartner said.
 
'There are currently more than 2,300 publicly traded software companies in the world, that's about 50 to 60 percent too many,' said Bob Hayward, senior VP at Gartner Asia-Pacific. 'For those companies that survive, this means that they can focus over the next several years on providing quality and not be price driven.'
 
Hayward added that companies would loosen their pursue strings next year. CEOs, CIOs and IT chiefs will be investing in technology to make their business stronger and more innovative as IT assets -- acquired pre-Y2K -- reach the end of their lifecycle and must be refreshed. Australia's ICT market would also increase by four percent from 2003 to 2004.
 
'Massive productivity improvements, significant increases in demand and enormous infusions of innovation will occur on the negative side, hundreds of thousands of workers in developed economies will be displaced, many of them currently holding high-paying, white collar positions,' he said.
 
Gartner also predicted that outsourcing would continue to accelerate and that by 2005, the number of enterprises entering new outsourcing relationships would increase 30 percent.
 
In the software industry, Linux and other alternatives to Microsoft would continue to make headway, mainly at the cost of Unix, Gartner said. Next year, 90 percent of large organisations in Australia would be using some form of open source software. There would be a greater shift of users from Unix to Linux than from Windows to Linux, Gartner said.
 
In the security market, organisations that implement a 'vulnerability management process' would experience 90 percent fewer successful attacks than those that make an equal investment in only intrusion detection system, the researcher said.
 
It also predicted that standards and regulations such as the Sarbanes-Oxley act in the USA, BASEL II in the global finance industry and the adoption of international accounting standards in Australia would have global knock-on effects.