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Net Integrators Flourish

May claim half of all Inter/intranet spending by 2000
By Bruce Caldwell
Issue date: March 25, 1996

The corporate rush to the Internet will force companies to spend tens of billions of dollars on Net-related services by decade's end, researchers project, and computer services firms are acting to meet the demand.

Global corporate spending on Internet and intranet systems will reach $208 billion by the year 2000, up from $12 billion in 1995, according to Input, a research firm in Mou ntain View, Calif. Half that projected spending--or $104 billion--will be for services, including consulting, training, systems integration, and outsourcing, Input notes. That's up from 1995, when spending on Internet services was only $5.8 billion.

To put that into perspective, companies spent $295 billion on all computer services in 1994, from an estimated $1.2 trillion spent on all IT, Input says. Among the firms staking out a position in this booming market is MCI, which announced on March 18 that it plans to triple capacity of its Internet network and expand application development and support services. The same day, Lockheed Martin Information Systems & Technologies launched its Entranet Services to help companies integrate Internet technologies into their existing IT infrastructure.

On March 12, Alltel Information Services Inc. announced a licensing and operations management agreement with Five Paces Inc., which wrote the software and built the data center that supports Security First Network Bank, a World Wide Web-based bank. Alltel will manage the data center, which will soon support similar Web-based banking services from Huntington Bancshares and eight other banks, according to Collins Andrews, president of the financial-services unit at Alltel, a unit of telecom operator Alltel Corp.

Establishing a Web presence isn't the only driving force behind the Net-services boom. "People are beginning to think about enterprisewide applications based on Internet technology," says Walt Wilson, marketing director at the Lockheed IS&T unit in King Of Prussia, Pa.

Input has begun a study to see which applications are likely to move to an Internet platform, and which are not. Until the study's outcome is available, it would seem wise to take to heart the fine print at the bottom of Input's Internet market forecast: "Warning: Volatile information--this is a changing model and sensitive to changes in assumptions."

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