Agenda

- INTELLECT – Who are we?

- The UK IT market

- European skills needs

- International comparisons

- Impact on economy and society

- INTELLECT’s agenda

- The future

- Your turn

The Information Technology Telecommunications & Electronics Association

Overview of Intellect

www.intellectuk.org

Introduction

- The Background to Intellect- Who Benefits from Membership- Intellect Influence & Representation- Campaigns - Knowledge & Advice- Networking Opportunities- Business Support Services - Marketing & Promotion Services- Summary

Intellect Beginnings

INTELLECT & FEI merged to form Intellect in May 2002

Intellect is committed to improving the environmentin which our members do business, promoting theirinterests and providing them with high valueservices

1000+ member companies

Membership spans large and small companiesincluding:ARM, BAE SYSTEMS, BT, CMG, EDS, IBM, Intel,Logica, Motorola, Microsoft, Nokia, Philips, Sony

Intellect Membership

Membership is for the company and its employees.

Intellect provides support services for the- CEO - Finance & Commercial Department- Sales & Marketing Department - HR Department - Legal Department

- Public Affairs Department

Intellect Supports Sectors & Markets

Supply side sectors:

- IT Software & Services - Telecommunications- Consumer Electronics- Components & Manufacturing

Market focused sectors:

- Public: Defence, Central & Local Government,Healthcare, Justice & Emergency

- Private: Banking & Finance, eCommerce, NewTechnologies, Testing, Utilities

Influence and Representation

Examples

- Cabinet Office, DTI, Home Office, Inland Revenue,

- Ministry of Defence, NHS, OFTEL

- Office of Government Commerce, the Radio Communications Agency and many other public and private sector bodies.

Campaign priorities

- Broadband Services- Digital TV- Manufacturing- WEEE- R&D Tax Credit

Other major issues

- Corporate Social Responsibility- Digital Rights Management- OFCOM- Spectrum Broadband- Innovation

Intellect Provides Knowledge & Advice

We provide market and sector knowledge & advice through:

-Email bulletins-Market intelligence reports -Benchmarking surveys-Business guidance publications -Business briefings

Intellect Networking Opportunities

We enable members to meet for personal & professional gain

-Intellect connects 6000 senior executives each year-Intellect runs 300 events annually-Intellect events enable members to generate business

contacts, build partnerships & share expertise

Intellect Business Support Services

We provide you with business support services to savemembers effort, time and money

- Weekly sales leads- Industry training courses- Free legal helpline- Escrow Service- Commercial benefits including insurance schemes & flexible

benefits- International services including a trade show calendar & managed

missions service

Intellect Marketing & Promotion

We help to raise members’ profiles in theindustry and to customers through:

• Free product and service directory listings • PR support and press opportunities• Speaker platforms & opportunities• Co-branding opportunities • Joint events• An online member database promoted to the user

community

In Summary

Intellect Provides:- Effective Representation - Networking Opportunities - Business Support Services - Marketing & Promotion Services- Industry Information & Advice

Questions?

The UK IT Market

(and international comparisons)

UK’s IT expenditure

£ Billion 2000 2001 2004 AAGR

01/04

Personnel 13.3 13.9 16.0 4.7%

Hardware 14.8 15.6 18.2 5.4%

Software & Services 21.9 23.8 32.0 10.4%

Miscellaneous 4.7 4.9 5.3 3.0%

TOTAL 54.7 58.1 71.6 7.2%

Source Holway 2001

UK IT and electronics factsSource:ONS T/O

£bnGVA

%Emps

000Trend

Components 6.3 .25 44 -

Computing/office 15.8 .27 56 -

Telecom/broadcast 15.0 .51 68 -

Defence, auto, ind 6.2 .32 73 +

Audio-visual 4.8 .12 33 -

Software & IT servs 40.6 2.85 573 -

Telecom servs 41.4 2.15 238 +

Totals 130 6.48 1085 -

Software & Services 01/04

£ Billion 2000 2004 AAGR

01/04

Project Services 8.46 12.34 +10.4%

Applications 3.20 4.21 +7.4%

Tools 1.12 1.54 +8.4%

Outsourcing 6.92 11.62 +13.9%

TOTAL 19.7 29.71 +11.2%

Source Holway 2001

28%

21%

4%

35%

4%4%4% System Software

Hardware Maint

Project Services

Tools

Appln Software

Outsourcing/Apps Mgmnt

Value-added Services

Market breakdown by product/ service

1999: £20,980 millionSource Holway 2000

32%

17%

4%

32%

2%2%

11% System Software

Hardware Maint

Project Services

Tools

Appln Software

Outsourcing/Apps Mgmnt

Value-added Services

Market breakdown by product/ service

2003 35,650 millionSource Holway 2000

UK Software and IT Services Industry Growth in Real Terms

(excluding system software and hardware maintenance)

14%

19%

21%

14%

7%8%

9% 9%

7%

0%

5%

10%

15%

20%

25%

1996 1997 1998 1999 2000 2001 2002 2003 2004

Source Holway 2001

Gartner Hype Cycle (June 2000) Gartner Hype Cycle (June 2000)

Will reach plateau in

VisibilityVisibility

MaturityMaturity

TechnologyTechnologyTriggerTrigger

Peak of Peak of Inflated Inflated

ExpectationsExpectations

Trough of Trough of DisillusionmentDisillusionment

Source Gartner Research Note 5 June 2000Source Gartner Research Note 5 June 2000

3-D Web3-D WebMicropaymentsMicropayments

5 – 10 years5 – 10 years

DigitalDigitalInkInk

SyntheticSyntheticCharactersCharacters

AudioAudioMiningMining

Over10 yearsOver10 years

Quantum Quantum computingcomputing

WAP/Wireless WebWAP/Wireless Web

JiniJini

Speech RecognitionSpeech Recognition

WebtopsWebtops

BluetoothBluetoothVoice PortalsVoice Portals

BiometricsBiometrics

2 - 5 years2 - 5 years

Smart CardsSmart Cards

< 2 years< 2 yearsASPsASPs

Voice over IPVoice over IP

XMLXML

Enterprise PortalsEnterprise Portals

xDSL/CablexDSL/Cable modemsmodems

Java LanguageJava Language

Plateau of Plateau of ProductivityProductivity

Slope of Slope of EnlightenmentEnlightenment

Rank Company Latest FY

UK SCS

Growth

1 IBM £1,645m 13%

2 EDS £1,560m 11%

3 ICL £910m 15%

4 Cap Gemini, Ernst & Young £825m 5%

5 CSC £754m 5%

6 Accenture £743m 19%

7 PricewaterhouseCoopers £690m 14%

8 Microsoft £620m 15%

9 Sema £587m 13%

10 Oracle £500m - 4%

Top suppliers to the UK SCS market in 2000

Leading Suppliers of Applications Software Products

and Solutions to the UK Market

Rank Company 1999 Revenue

(£m)

1 Microsoft 360

2 SAP 140

3 ICL 90

4 Misys 79

5 Sema 79

6 Sage 75

7 EDS 65

8 Logica 59

9 Oracle 45

10 RM Group 44

Source Holway 2000

18%

21%

19%

10%

32%

Manufacturing

Finance

Public Sector

Telecom/Utility

Retail/Transport

Market breakdown by industry

2000: 21.9bnSource Holway 2001

34%

10%

19%

20%

17% Manufacturing

Finance

Public Sector

Telecom/Utility

Retail/Transport

Market breakdown by industry

2004: 32.0bnSource Holway 2001

SKILLS MOST IN DEMAND

2000 1999 1998 1997 1996 1995 1994 1993 1992 Skill

1 1 3 2 2 3 4 15 - C++

2 8 13 - - - - - - Java

3 14 25 - - - - - - Internet

4 4 4 1 1 1 1 2 1 Unix

5 2 2 3 4 4 6 5 4 Oracle

6 6 6 8 9 9 8 9 12 SQL

7 3 1 4 7 14 - - - WindowsNT

8 5 5 7 8 8 10 17 69 Visual Basic

9 7 7 5 3 2 2 1 2 C

10 21 28 - - - - - - HTML

Source: SSP/Computer Weekly

Profession Content Sub segment Examples Required skills

ICT professionals Employed in the IS department of companies or other type of ICT user organisations, staff employed at IT services, products and telecoms companies providing technology design, development, implementation, operation and support.

Applications Applications development, C++ Developer, C++/Unix specialist, Java analysts, SAP implementor, Functional Manager – Applications, software tester, helpdesk analyst, and call-centre operations

Technology

Internetworking Internetworking engineer, WAN manager, E-business implementor, E-commerce implenter, and call-centre integrator

Distributed computing

 

Host-based computing

Unix/NT administrators, server consultants, escalation specialist, PC Desktop Support Engineer, Technical Support Analyst, and Customer Support Specialist

Technology neutral

 

source EITO

Demand for E-business and ICT skills in Western Europe by category in 2000

10%

11%

79%

ICT skills

E-businessskills

Call centre

59%29%

12%

20002003

Demand for E-business and ICT skills in Western Europe by category in 2000

Applications53%

Distributed27%

Technology neutral

7%

Host-based4%

Internetworking9%

Applications37%

Distributed29%

Host-based8%

Internetworking3%

Slice 68%

Technology neutral

15%

20002003

Germany21%

France17%

UK18%

Italy10%

Spain5%

Other29%

Demand for ICT skills by country in 2000 % breakdown

27%

20%

16%

9%

8%

5%

4%

5%

3% 2% 1%

Germany

UK

France

Scandinavia

Italy

Netherlands

Switzerland

Spain

Belgium

Austria

Portugal

European IT Expenditure in 2000 by CountryTotal = Euro 398bn

Source Holway 2001

16%

Europe’s IT expenditure

Euro Billion 2000 2001 2004 AAGR

01/04

Personnel 105.5 109.3 121.7 3.6%

Hardware 86.2 89.0 97.2 3.0%

Software & Services 162.9 182.6 260.0 12.5%

Miscellaneous 43.0 44.6 48.8 3.1%

TOTAL 397.5 425.6 527.7 7.4%

Source Holway 2001

Worldwide Information and Communications

Technology Market in 2000

ICT Equipment 33.2% £441bn

Software Products 9.6% £128bn

IT Services 18.7% £249bn

Carrier Services 38.5% £511bn

Total 100% £1,328bn

Source Holway 2001

The future (last year)

- Revenues, profits, cash, are kings

- IT must deliver benefit– economic– social

- Internet realistically placed

- European market growth

- From products to services, transaction-based charging, asp’s

The future (now)

- Revenues, profits, cash (that should be CASH!!) are kings

- Survival

- IT must deliver benefit– economic– social

- Internet realistically placed

- Volatility, uncertainty esp telecomms

So what?

Impact IT can have

- improve productivity and raise service levels– private sector

eg banks, manufacturing, insurance– public sector

eg hospital, schools, military

- magnifies trust and ethics problems

- social– eg text messaging, email,

Role of governments

- Frameworks and rules of the game– nationally– internationally

- Users and exemplars– e-readiness

- Goal setters

Still excellent opportunities

for you

Case studies

A. Public sector project goes wrong

B. Large IT services co. loses its way

C. Food retailer goes .com

D. eStart-up