C. Future Developments 1997 2003



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Acceleration of growth rates between 10 and 24%. In the proposed questionnaire the European experts were asked which growth rates for professional electronic services would be probable in coming years. As a help, the growth rates in 1996 and 1997 were given.

Table 4

Average Yearly Growth Rate 1998 - 2003 in 5 European Countries

In %







1996*

1997*

1998-2003**

Austria

20.1

-

15.4

Finland

12.2

13.0

19.5

Spain


-

-

12.0

* Real Growth Rates

** Estimated Yearly Growth Rates


According to the results in table 4, there was no country with an estimated yearly growth rate in the area of professional EIS below 10%. In Austria (15.4%) and Finland (19.5%) the estimated coming growth rates were much higher, and in the case of Germany the experts even estimated an acceleration of yearly growth rates from 15.0% (1996) and 22.0% (1997) to 23.5% for the period 1998 - 2003.

"Accelerator of growth rates": increasing information needs, decreasing prices and other factors. The European experts saw especially the following factors as "accelerators" of current growth rates:

  • the Internet which "will proliferate, more added value will be offered in the net, and wireless communication will speed the development" (Finnish report);

  • increasing knowledge and awareness about the Internet and the value of information among business people and the professionals;

  • increasing needs for information as a result of the Europeanization and globalization of the market;

  • decreasing prices as a result of decreasing production costs;

  • new information offerings so there will be nearly no gap anymore in the supply of professional electronic information;

  • substitution of print products by electronic versions;

  • spillover effects in EIS usage between companies and economic sectors;

  • increasing exploitation of the potential of end-users respective increasing the integration of external data in Intranets and Extranets;

  • secure methods of electronic payment already in the pipeline and

  • advertisement as a new source of income.

Additionally, some experts gave also reasons for decreasing growth rates:

  • EIS usage reaching saturation level;

  • still high barriers of usage in small and medium-sized enterprises and

  • shutting down information centers as a result of mergers and acquisitions.

III.2 Online vs. Offline

Market share of offline decreasing, online retropective with unclear prospects, online real-time relatively increasing. In the proposed questionnaire the European experts were asked how the market shares of the subsectors of the professional EIS – offline, online retrospective and online real-time – would probably increase or decrease until 2003. As a help, the market shares of 1997 were given.

Table 5

Shifting Market Shares of Professional EIS Submarkets in 3 European Countries 1998 - 2003

In %





Market Shares




Finland

Germany

Spain




1997*

2003**

1997*

2003**

1997*

2003**

Online real-time

59.0

65.0

43.0

46.6

63.0

70.0

Offline


6.0

6.0

22.0

14.8

17.0

11.0

* Real market shares

** Market shares estimated


In the case of Austria, the experts were confronted with the market shares of 1997 (online real-time 47%, online retrospective 37%, offline 16%). On the average, nearly no change of market share was foreseen (no quantification given).

In accordance to the estimations in table 5:



  • the market share of real-time will clearly rise and may even dominate the Finnish and Spanish markets (with market shares of 65% respective 70%);

  • the market share of retrospective online information will fall in Finland (from 35% to 29%) and Spain (from 20% to 19%), but will increase in Germany (from 35% to 38.7%);

  • the market share of offline will at least stagnate (as in Finland with an already market share of only 6%) or fall rather dramatically (as in Germany and Spain).

Reasons for the decreasing market share of offline. No European expert assumed that offline would increase its market share until 2003. Reasons given for decreasing market share of offline were:

  • relatively more need for real-time data and life events which CD-ROMs and other offline services cannot deliver;

  • handling too complicated;

  • too much costs for updating.

But offline will stay as an important submarket. But there was also nearly no doubt that offline will stay as a relatively small but nevertheless important submarket. This case was put forward, e.g., by the report for Luxembourg:

"An argument that was however mentioned in favour of the importance of offline services is bandwidth. The experts felt the trend for many applications was towards ever more massive use of multi-media content, requiring media with large bandwidth capacity. The availability of optical storage media and its advantages in bandwidth (speed), storage capacity and ease of use give it a real advantage in this respect, and as long as the bandwidth problem of the Internet was not satisfactorily solved, offline services would continue to enjoy a healthy market share, the experts believed. DVD was mentioned as certainly the most promising development in this field for the last years."

Reasons for the increasing market shares of online and online submarkets. Reasons given for an increasing market share of the online real-time and/or retrospective submarket applied often generally to the online sector. This was especially true for reasons given in favour of an increasing market share of online retrospective. For example:



  • There will be an increase of Internet PCs reducing the costs of online usage further.

  • For this and for other reasons the price of online usage will decrease in comparison to offline usage. Therefore online multimedia products at competitive prices become a possibility.

  • The substitution of print products by EIS will continue.

  • The online information suppliers will invest in quality and close the gap of information deficits.

Reasons for an increasing market share of real-time. Reasons given for an increasing market share of real-time were:

  • Generally, markets develop more rapidly than ever. That leads to an increasing need for real-time data, including news.

  • The change from national currencies to the EURO supports a boom on the European financial market which leads to an additional demand for real-time financial information.

Reasons for a decreasing market share of real-time. But the real-time sector had also its sceptics who probably took into account that the market share of real-time decreased continually in the 90's. Reasons given for a decreasing market share of the real-time sector were:

  • Mergers and acquisitions among power users of real-time financial information, especially banks, lead to shutdowns of information centers and a decreasing EIS usage.

  • Real-time financial information services are so expensive that new potential clients will further abstain while the traditional clientèle has reached a saturation level.

*
What will really happen? In all sectors, the absolute growth will continue. The relative decline of the offline sector is not in dispute, and the relative position of online retrospective may more depend on the development of the real-time sector than on its own. So the most surprising result is the discrepancy between the past developments of the real-time sector losing market share from year to year in the 90s and the envisaged boom by the experts.

Part of the explanation of this contradiction may be that traditionally real-time services are understood as real-time financial information services and the newswire services of the newswire agencies. True, newspapers went also onli-ne but in the past the retrospective element was much stronger. Therefore online newspapers were realistically seen mainly as a retrospective offering.

This is changing with the Internet where every day new real-time or near real-time news offerings are started (partly or even totally forgetting the possibility and/or the value of retrospective information which may result into a quality problem. One expert, e.g., spoke of "real-time fast-food"). Nevertheless, a new submarket with real-time news comes into being changing the definition and characteristics of the online real-time sector and making this sector absolutely and relatively stronger.



III.3 Networks and Contents

The overwhelming and inevitable success of the Internet. In the proposed questionnaire the experts were asked how networks and content areas would probably develop until 2003. Quantitative results of the "average" opinions do exist for the cases Finland, Germany and Spain.

Table 6

Average Yearly Growth Rate for Networks and Contents in Professional EIS-Markets in 3 European Countries 1998-2003

A. Finland




N

More than
15 %


Less than
15 %


Stag-nation

1. Online retrospective database services










1.1 Networks









Other: electronic book



1

-

100

-

x) Abbreviations used: UMTS = Universal Mobile Telecommunications System; GSM = Global System for Mobile Communications; STM = scientific, technical and medical information; CD-ROM = Compact Disk Read-Only Memory (optical compact disc); DVD = Digital Versatile Disc.

B. Germany




N*

Over
20%


Over
15%- 20%


Over
8%- 15%


Over
0%- 8%


0%
Decrea-se


Networks



















1. Internet

25

56.0

40.0

-

4.0

-

2. Further Networks

10

30.0

10.0

20.0

10.0

30.00

Contents



















3. Credit information

21

23.8

28.6

14.3

33.3

-

4. News

21

33.3

45.5

11.7

9.5

-

8. Further information



6

33.3

10.0

50.0

6,7

-

C. Spain




N*

Over
20%


Over
15%- 20%


Over
8%- 15%


Over
0%- 8%


0%
Decrea-se


Networks



















1. Internet

23

82.6

17.4

-

-

-

2. Further Networks

18

19.6

13.0

15.2

31.5

20.7

Contents



















3. Credit information

84

37.5

8.3

20.8

33.3

-

4. News

24

29.2

20.8

37.5

8.3

4.2

7. STM information



24

25.0

16.7

16.7

37.5

4.2

More than one national report said that the classifications offered for networks were incomplete. Finland, for example, added wireless communication as an additional network possibility and commented:

"The majority also said that the growth rate of wireless market would exceed 15%; more than half of them said it would even rise to over 20%."

Additionally the rise of Intranets were seen as very important:



"In the year 2000, there will probably be more people connected to an Intranet than to the Internet. This trend has its cause in the excessive use of the Internet in the daily working life. The need for a control of the results is the installation of firewall sheriffs. Another reason is that for EIS providers, Intranet permits the making of extensive uses of their services. They can then well adapt their offer to demand."

Nevertheless, there is one very clear and outstanding result which overshadows all other estimations as well as additions: The success of the Internet will continue and will be as overwhelming as inevitable.



Qualitative comments primarily a confirmation of the overwhelming success of the Internet. The qualitative comments of the experts were more or less a confirmation of their quantitative estimation concerning the future development of the Internet. Additional aspects mentioned were:

  • With the rising capacities of the Internet already beeing under way, there will be no bottleneck anymore.

  • Frequently, Internet and world-wide networks were seen as the same. In other words: The success of the Internet is primarily the success of WWW.

  • With the coming "multimediasation" of the Internet the majority of the population (and nearly all businesses) will become Internet users.

  • Other networks will decrease in relative importance and may eventually be integrated into the Internet. However, an absolute growth of the other networks was also foreseen by many experts.

Networks outside the Internet may still have their relative strengths but the reaons for it could partly be turned into an argument in favour of the Internet as soon as the still existing security and other bottleneck will be eliminated. Te report of Luxembourg stated for example:

"The reasons mentioned for this assessment were linked to the more efficient control of private networks compared to the Internet, and safety as well as confidentiality are the key factors which were emphasised."

Generally, scepticism was seldom in the area of networks, and if it existed it was rather directed to E-Commerce than to EIS and concentrated on special areas like secure payment and general data security, all problems for which solutions were expected in coming years. Even the most sceptical voices could mostly be integrated into the argument: "The growth if not the explosion of the Internet would even be higher if ..."



Higher growth rates for news and business information, lowest growth rates for STM and law information. According to the quantitative estimations, the growth rates of news and business information will be highest in coming years, while STM and law information will come to remarkably lower growth rates.

Partly this is a perpetuation of previous developments up to the present. But there are two interesting exceptions:



  • The submarket of real-time news is just starting but will soon become one of the more important EIS submarkets for professional users.

  • Business information will grow stronger than law information.

III.4 The Offline Submarkets

Diskettes nearly finished, CD-ROM relatively losing to DVD-ROM. In the proposed questionnaire the experts were asked how the composition of the offline market would probably be altered in coming years. Quantitative estimations were given in the cases of Germany and Spain.

Table 7

Average Yearly Growth Rates in the Professional Offline Market 1998-2003

in 2 European Countries
A. Germany




N*

Over
20%


Over
15%- 20%


Over
8%- 15%


Over
0%- 8%


0%

CD-ROM

22

9,1

4,5

31,8

13,6

40,9

Other Formats1)



4

-

25,0

50,0

25,0

-
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