According to MIC (Market Intelligence Center), an ICT industry research institute based in Taipei, in 2006 Taiwanese large enterprises' average IT spending amounted to NT$38.5 million (US$1.2 million; US$1=NT$32.8). In 2007 this number is expected to grow 10.9% to NT$42.7 million (US$1.3 million). Following changes in industry and consumer environments, and the increasing global competition, Taiwan-based companies building global value chains have stimulated the increases in IT spending. It is expected that in 2008, Taiwanese large enterprises' IT spending will increase 39.2%, reaching NT$59.5 million. Companies with more than 2,001 employees and companies in the banking service sector will provide the largest stimulus for this growth. Spending on IT personnel represents the largest share in large enterprises' IT spending, with this share expected to reach nearly 30% in 2007. This share is expected to reach as high as 40% for enterprises with less than 1,000 employees. However, in the period 2006 - 2008 spending on IT software and hardware is expected to have the highest growth rates. Enterprises with more than 2,001 employees are the most aggressive in these areas.
When procuring PCs, Taiwanese large enterprises focus on computing power. Therefore, dual-core 64-bit CPUs (Central Processing Unit) have become key items. Furthermore, enterprises have shown a high level of interest in Intel's vPro platform products, highlighting the fact that setting up IT hardware management systems is becoming a main point of emphasis in enterprises' PC product investments. Notebook PC penetration is gradually on the rise, showing that enterprises' demand for mobile computing capabilities is growing. Server product procurement is aimed at enterprises' existing IT infrastructures, with the highest demand for 1U and 2U products. Enterprises with an employee base of more than 2,001 have a high intention to use blade servers. Among data communications equipment, use of VPN (Virtual Private Network) and VoIP (Voice over Internet Protocol) is most widespread. However, with improvements in overall network environment and the increased penetration of mobile devices, demand for MVPN (Mobile Virtual Private Network) and push mail is increasing. NAS (Network Attached Storage) is the most popular storage equipment product, because of its low costs, simple structure, and easy management.
Manufacturing sector enterprises' main goal in their IT software investments is to strengthen data integration capabilities and improve the quality of decision-making analyses, stimulating these enterprises' demand for ERP (Enterprise Resource Planning), BI (Business Intelligence), and CRM (Customer Relationship Management). 90% of ERP demand is for upgrades. Enterprises in the service sector are continuing to invest in BI and digital learning tools to improve customer services and strengthen employees' professionalism. In order to improve cooperative links with up- and downstream partners, these enterprises also continue to invest in upgrades and establishment of ERP. In 2007, Taiwanese large enterprises' average investment in IT outsourcing is expected to reach NT$4.18 million (US$127,439), with the highest investment coming from enterprises with more than 2,001 employees. However, enterprises with relatively small employee bases spent a relatively large share of their total IT investment on outsourcing, and this share is highest among enterprises with an employee base between 200 and 500. Currently, the main outsourcing services used are application system design and development and telecom and network equipment maintenance, but in the coming three years demand will be highest for PC and hardware peripheral maintenance.
Currently, Taiwanese large enterprises have a high level of trust in foreign companies' IT hardware products. For computing systems, IBM and HP enjoy the highest level of trust, with Taiwan's Asus following close behind. In network communications products, Cisco has clear advantages, but after a long period of market development D-Link has gained the trust of 40% of enterprises. The storage equipment market is dominated by foreign companies, with HP, IBM, and EMC the most popular. In software and IT services, Taiwanese large enterprises identify most with Oracle, Microsoft, and IBM due to their excellent product and service quality. Enterprises' trust in the Taiwanese company Data Systems Consulting is gradually increasing, as this company has been developing the market for an extended period of time.
In 2007 and 2008, Taiwanese large enterprises' main goals in their IT spending are strengthening their IT security environment, improving the professional capabilities of their IT personnel, and integrating their existing information systems. To reach these goals, enterprises are actively trying to improve IT personnel capabilities by using training courses, with demand for operating systems, database, and network and data security training courses and certification the highest. Outsourcing is also an important strategy for the abovementioned goals. However, in order to control project development schedules and quality, and ensure a high level of security for these projects and for enterprises' internal IT environment, whether or not companies have CMMI and ISO27001(BS7799) certifications will be main criteria for enterprises when choosing outsourcing partners.
More information can be found in the following MIC reports:
Taiwanese Large Enterprises' Demand for IT Applications and Software, 2005-2007
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About MICMarket Intelligence Center, based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. http://mic.iii.org.tw/english