National Software Strategy for Scotland : Scotland's Potential In Software : Global Demand

The Global Market

In 1996, software and services accounted for about 27% of the world market in information and communications technologies (ICT) at about £200 billion7. The growth of global ICT market in 1997 is expected to be about 8%. The United States represents 42% of the world market for software and services (1996).

Western Europe accounts for about 30% of the world software market (based on 1996 figures) and the UK represents about 15% of the European figure.

Growth in the global software market is likely to be substantial to the year 2000. This is driven by:

• the increase in processing speed and data storage capacity enabling, inter alia, higher levels of abstraction and subsequent demands on software;
• increasingly short product lifecycles for PCs. According to Gartner Group PC product lifecycles have moved from 18 to 24 months to 6 months or less. This is driving down software product lifecycles;
• the growth of Internet usage - currently doubling in size every 53 days;
• increased user-demand for system inter-operability and standards driving the introduction of open-systems and pseudo-open standards;
• the organisations that use business software are becoming increasingly disaggregated and whilst simultaneously becoming more customer focused adopting and requiring more sophisticated software;
• addressing the “Year 2000” issue and system changes to cope with the introduction of European Monetary Union (EMU).

These trends are likely to continue - further driving demand for software.

However, Year 2000 and EMU present major strategic risk to the achievement of strategic change. They will divert significant resources into resolving issues which are short/mid term and provide little scope for long term leverage. Similarly, users IT budgets and management will be stretched and there will be less scope for developing new applications and relationships.

7 Source: IDC - converted from USD to Sterling