This Key Note Market Report focuses on the business usage of, and spending on, the Internet. It examines two areas: business expenditure on Internet services and software (and hardware), and business revenues from the commercialisation of the Internet (i.e. revenues from Internet e-commerce).
In 2004, total business expenditure on Internet services, software and hardware was an estimated £8.29bn, a rise of 15.8% on 2003. The market is being driven by expenditure on software and services, reflecting the moves by companies to exploit their Internet connections to improve their operations and generate revenues for their online activities. E-commerce revenues are rising rapidly, driven mainly by business-to-
If the period spanning the late 1990s to the year 2000 can be labelled as the infrastructure build-out phase of the Internet, and the period between 2000 and 2003 can be called the phase of commercial exploitation of the Internet, then 2003 to 2005 can be labelled as the period when the Internet came of age. In this period, as in the rest of the IT industry, clients are focused on the return they receive on their investment. Return on investment (ROI), net present value (NPV) and the internal rate of return (IRR) on Internet projects have become watchwords for the Internet industry.
In 2005, Internet connectivity is almost ubiquitous among UK companies. As such, it is no longer seen as only a tactical weapon used to improve business communications;
Key Note forecasts rapid growth in both e-commerce revenue and business expenditure on Internet services, software and hardware over the next 5 years to 2009. Greater consolidation among vendors of Internet products and services is expected, with services such as voice over Internet protocol (VoIP) and on-demand computing being prime drivers in the uptake of higher-capacity broadband connectivity among businesses. In the longer term, companies such as Yahoo! and Google could play a more significant role in the business Internet market, using their Internet platforms to sell IT and business services to small- and medium-sized enterprises (SMEs).
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