Market reports, business information and market research - Midnight Croquet. MSI Online Business Information: UK

In the 1990s, the UK market for electronic business information has increased substantially. Annual growth rates of over 10 percent have been registered in each year since 1995 with sales increasing by 11 percent in 1998.

This growth can be attributed to a significant increase in the online electronic business information market, including Internet sales. The main reasons for this increase in demand are:

* the growing penetration of IT infrastructure in organisations

* the growing influence of service sectors in the UK economy

* increased competition and merger and acquisition activity in various sectors

* increased spending by core user groups, notably financial service and management consultancies

* the proliferation of new services on the Internet as content providers and publishers sell direct, in addition to traditional sales through online hosts

The most dramatic sales growth has come in the Internet market for business information with sales increasing by 104 percent in 1998. This market has grown from virtually nothing in 1995 to account for 24 percent of the electronic business information market in 1998. Sales via conventional online systems declined for the first time in 1998 as users switched to Internet sources. Sales of business information on CD-ROMs peaked in the mid 1990s but have been declining in subsequent years.

The core customers for online and CD-ROM business information, and by far the heaviest spenders, are business service companies led by banks, other financial service companies, management consultants, legal firms, media and advertising companies. The private sector service industries accounted for 63 percent of sales in 1998. The second largest sector is other private sector companies claiming a 23 percent share of sales. The remaining 14 percent of sales came from academic institutions and public sector bodies.

The spread of web technology has had a radical effect on both demand and supply in the market. The traditional market has been librarians and information officers but a much larger market of end-users in organisations is now being exploited. To attract these end-users, providers are offering easier to use systems and discounted fixed-priced subscription packages based on the number of users in an organisation.

On the supply side, web technology has enabled many content providers and publishers to sell their products and services directly to the customer as well as via the traditional mechanism of the online host. Web technology has also brought new entrants into the market. The result is a market that is becoming more competitive with more players chasing the end user market. The price competitive nature of the industry is likely to force some companies out of the market in the next two years.

MSI forecast that the UK online and CD-ROM business information market will continue to increase during the period 1999 to 2003 although at a slower rate than during the review period. Internet sales will continue to grow strongly and the web is expected to become the major delivery channel by the end of 1999.

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MS72009 MSI ONLINE BUSINESS INFORMATION: UK: JUNE 1999