The 'hot' areas to hit in IT

With overall growth in the IT market expected to slow, suppliers' best bet is to hone in on a few key 'hot' areas.

Phil Codling, senior analyst with Ovum, described the current climate as "a mature market where pressures are going to push the fairly modest growth we've seen downwards".

The six per cent IT market growth in 2005, for instance, will start tailing off toward the end of the decade.

The recent strength of the UK public sector is going to wane as well, with Ovum predicting that public spending will fall below double-digit levels after 2007.

Codling said: "We've been through an extraordinary period in the past few years where the public sector has pulled up the rest of market - that effect is going to diminish."

One driver of growth - and the only one where Ovum has raised its forecasts - is business continuity and disaster recovery. Following the terrorist activity and multiple natural disasters of 2005, Ovum is seeing businesses reassess their spending here - both for consulting and for new software and services.

Another focal point - shared services initiatives - will drive government outsourcing over the next couple of years, according to Ovum. As it'll be 2007 before major outsourcing contracts are brought to market, now is the time to be taking a position here. Codling described this area as a "slow burner but big".

In financial services, regulation is still driving IT spending but a lot of companies are taking a 'wait and see' approach until they figure out what they're going to need to do to comply - and when.

Ovum also points to CRM (customer relationship management), business intelligence, next-generation IP networks, service-oriented architecture and legacy infrastructure renewal as "buoyant" for the next few years.

Codling said: "Most accept [IT] is a mature market. The key is to select the hot areas and go for them."