Primary Research

Primary research is conducted by interviewing both IT vendors and users of information technology.

IT Vendor Surveys - Killen & Associates vendor surveys target the leading IT vendors of equipment, equipment maintenance services, data communications resources, and information services. Information services includes professional services, systems integration, outsourcing (including processing services), integrated systems (software applications bundled on a specific hardware platform), software products (both systems and applications software), and telecommunications services including value-added networks (VANs) and online databases.

Killen conducts interviews by telephone, gathering data on current and forecast (five-year) vendor revenues for each of the categories "as appropriate" listed above. The goal is to identify a minimum of 60% of a market's size in terms of specific vendor revenues. Revenues are segmented, where possible, into U.S. and international groupings, and the latter further apportioned into country and regional amounts. Five-year forecasts are based upon vendor estimates of future revenues, and a determination is made as to whether growth is by acquisition or internal expansion. In addition, Killen also assesses the rates at which individual business, product or service segments are growing. Telephone interviews may be augmented by mailed, faxed or e-mailed questionnaires. Respondents are assured of anonymity, and individual company sales determined by surveys are used only to identify aggregate industry or geographic revenues.

User Surveys - User surveys are conducted to determine current and planned IT budget allocations. Telephone surveys of CIO, IT and functional managers provide details on applications, systems and platform plans, identify current and planned usage of outside products and services, and reveal user concerns regarding IT and business issues facing their company. Surveys identify IT budget size, internal budget allocations for staff and facilities, the percentage such budgets represent of total corporate revenues, and vendor and IT product preferences when such information is available.

Market Forecast Methodology

Base year market forecasts are prepared from the data acquired from vendor revenue surveys. The current revenues are "cleansed" in a process that calendarizes the financial data by adjusting fiscal statements to correspond to calendar years, and adjustments are made to allocate revenues to U.S. and international markets, as appropriate to the forecast statement. The sample is then projected to IT product and service market segments or industry market segments, as appropriate, and then consolidated to determine base market size.

Killen forecast methodology next takes the base market estimates and enters them into a forecast model that applies projections of inflation, and considers IT industry economic and technical research data from secondary sources, to produce five-year market forecasts. All forecasts are presented in current dollars, with inflation included in dollar amounts.

Secondary Research Sources

Inflation data is based upon the Blue Chip Economic Indicators Consensus report's forecast of market deflators (inflation). This source's forecast of GDP growth and GDP deflators is based upon the consensus of a panel of economic experts' drawn from the U.S.'s leading economic, financial and business firms, and has a long history of balanced and accurate projections. Other resources, such as Bank of America's World Information Services, various U.S. Department of Commerce publications, industry associations, and trade publications also provide important data.

Rounding

Data in forecast tables is generally presented to the nearest million: however, figures may be rounded, and if so, a notation to that effect is provided. Charts and graphics are generally rounded to a level appropriate to the purpose and visual accuracy of the graphic.

Forecast Format

Forecast tables generally provide base year and base-year-plus-five-years forecasts, with a compound annual growth rate (CAGR) indicating the rate of increase during the five-year forecast period. Where appropriate, forecasts for intervening years will also be provided, but the CAGR will apply to the overall five-year period.