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Dataquest Sees Booming Internet Market


A recent study by Dataquest reports that the Internet software and services market will become a $32 billion industry in 2001.


The San Jose, Calif.-based market research firm also says that 82 million personal computers will be connected to the Internet by the end of this year, a 71% increase over 1996.


The market is being driven by the increased use of the Internet in the business sector and will continue its healthy growth through 2001, when 268 million computers are projected to be connected, say Dataquest analysts.


"Businesses that already pay for desktop computers for employees increasingly recognize the incremental benefit of adding Internet access," said Kathryn Hale, principal analyst for Dataquest's Internet And Enterprise Strategies Worldwide program.


"Within two years, extranet access will become increasingly important for business PC users in order to get the job done. By 2001, it will become nearly pointless to pay for a desktop computer for an employee without including Internet access," Hale states.


The dramatic growth in Internet use has generated a software and services market that is forecast to grow 60% in 1997, with revenue reaching $12.2 billion, up from $7.5 billion in 1996. Dataquest predicts the Internet software and services market will reach $32.2 billion by 2001.


"At $7 billion in 1997, the Internet services market is nearly 12 times the size of the Internet software market," says Hale, "and the services market is headed toward $29 billion in 2001."


"Despite the fact that annual fees per active seat are headed downward from $147 in 1996 to $108 in 2001, the rapid growth in the number of seats points to a market opportunity worthy of the attention of even the largest telecommunications company," she adds.
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