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Half of IT firms will vanish by 2005, say analysts

Analysts offered their predictions this week of what the rest of the decade has in store for the IT industry, the most startling of which came from Gartner, which foresaw a major shakeout of IT companies.

Gartner said that more than half of today's IT companies will disappear between now and 2005, leaving the survivors being better able to dictate prices.

The consolidation will be accompanied by a major shift in skill requirements in the IT industry, with high demand for specialists in broadband, wireless, Linux, content management, real-time analytics, data mining, security, middleware, certification skills, business intelligence and knowledge management.

Meanwhile, consulting firm Arthur D Little predicted the global broadband market will almost triple in size from $30bn today to $80bn in five years, representing a compound annual growth rate of 22%. Europe will show a CAGR of 30%.

There are now 57 million broadband subscribers worldwide, with 45% of the revenue generated in North America and around 20% in Europe and Asia.

Forrester Research said US online marketing will grow into a $15.6bn business by 2008, of which search engine marketing will account for $5.6bn, because businesses are increasing their digital marketing at the expense of traditional advertising, trade promotion and consumer promotion.

IDC predicted that online advertising in Asia will increase fivefold in the next four years from $304m in 2002 to $1.62bn in 2007. Revenue from push online advertising, such as banners and sponsorships, will reach $789.6m in 2007, in the seven markets studied - Australia, China, Hong Kong, India, South Korea, Singapore and Taiwan.

Search advertisements, classified ads and e-mail marketing are expected to grow to $832m by 2007.

David Legard writes for IDG News Service

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