Consultant says US energy industry is increasing its IT spending

The US continues to provide a growing market for technology providers, said IDC, a market intelligence and advisory firm based in Framingham, Mass.

July 8, 2003

2 min read

By OGJ editors
HOUSTON, July 8 -- The US continues to provide a growing market for technology providers, said IDC, a market intelligence and advisory firm based in Framingham, Mass.

The energy industry's spending on information technology is expected to grow from $18.9 billion in 2002 to more than $25 billion in 2007, representing a 5-year compounded annual growth rate (CAGR) of 5.9%, IDC said.

The forecast was part of a study released last month that was entitled: "US Energy IT Spending Forecast, 2003-2007: A First Look at the Year Ahead."

"In just a few short years, the energy industry has gone from promises of great growth to picking up the pieces with the collapse of energy trading markets, the uncertainty of deregulation, and the war with Iraq," said Christopher Boone, an IDC energy and utilities researcher.

"Nevertheless, IT vendors with energy industry expertise continue to gain from increases in oil and gas exploration investments by leading players and the need to consolidate IT systems in the aftermath of mergers and acquisitions. These efforts will sustain IT spending growth in the near term," Boone added.

IDC provided the following recommendations for IT vendors targeting the energy industry:
-- provide IT products and services that cater to consolidation in the
industry.
-- be prepared for and help energy companies manage volatility.
-- embed security into all IT initiatives aimed at the energy industry.