The IT market in Asia-Pacific (excluding Japan) will grow by 11% this year to US$88 billion, driven by strong growth in the region's two biggest developing economies, China and India, according to research firm IDC.

The IT market in China will grow 18% to US$29.4 billion, 33% of the overall regional IT spending, IDC says. India's IT market will grow 19% this year, and together with South Korea's expected 9% growth, these three countries will be responsible for 80% of the IT market growth in Asia-Pacific, IDC says.

There will also be major structural changes in the Asia-Pacific IT market, with a move away from proprietary architectures and a new focus on business innovation. As users demand standards-based products, vendors will have to find new ways to differentiate their products without relying on proprietary barriers, IDC says.

The IT market is moving into a new growth phase, so 2004 will be a key year for defining the shape of the industry for the next few years, IDC says.

One of the hot areas in 2004 in Asia-Pacific will be storage, according to IDC. The total storage capacity deployed across the region will rise 54% from 190,000T bytes to 300,000T bytes. This will create added demand for storage management software and services, a market expected to grow by 26% next year, IDC says.

Other predictions for the Asia-Pacific IT market this year include:

— economic liberalisation is forcing small and medium-sized businesses to streamline their operations, and this will become one of the most competitive markets for IT vendors,

— consumers will continue to demand new digital media products, putting pressure on traditional consumer electronics firms,

— IT suppliers will be under pressure to align their products and services with users' demands to solve high-priority business problems, and some vendors will fail to make this transformation,

— outsourcing to developing countries in Asia-Pacific will continue to grow strongly despite a public backlash in countries such as the US Competitive pressures will force the private sector to adopt this kind of low-cost outsourcing sooner rather than later,

— IP (Internet Protocol) telephony will finally gather momentum in the corporate sector due to the cost savings and extra functionality now available,

— wireless mobile services will make their mark in the corporate sector in 2004 as basic applications are complemented by location-based information services, multimedia messaging services and industry-specific applications,

— online advertising will emerge as a major industry, with revenues expected to grow 40% in 2004 to $US637 million. The online audience will continue to expand, with the total number of internet users in the region growing by 22% to 205 million.

(China Daily January 5, 2004)