Datamonitor stresses need for IT investment

European utilities that fail to invest heavily in their IT systems in the next five years will find it increasingly difficult to compete, according to a report by IT consultancy Datamonitor.

The report, Technology in European Utilities, 1999 to 2004, predicts that by 2004, utilities will spend over $6.8bn on IT, compared to a projected spend of $5.5bn this year.

Growth will be driven by the deregulation of the utilities marketplace and the increasing need to invest in customer retention. Utilities will be forced to reduce costs, improve service levels, and enhance asset and customer management, the report says.

All of this should spell good news for external IT services providers, who will be used to install and integrate new IT systems into existing infrastructures. Datamonitor predicts that, by the end of this year, over $1bn worth of third party services will be purchased by utilities.