This IDC study analyzes the current situation of iDC provided by communication carriers and future market direction based on the interviews with leading communication carriers. Based on the performance of the iDC market in 1H04, this study confirms the size of the carriers' iDC market at the end of 2003 and updates the forecast of the market size.

"In 1H04, the size of the iDC market provided by communication carriers continued to grow. However, there are factors that require the forecast to be revised downward from the earlier forecast. This is mainly because carriers' development and delivery of hosting and value-added IT services failed to make much progress compared to the moves of leading IT vendors. In order for carriers to expand their iDC market, they will have to further focus on the development of upper layers of services and applications on top of their advantages such as network connectivity, solid facility, and the ability to provide operation maintenance staff with high technical skills. To achieve this, carriers should promote organic alliance with IT vendors and SI vendors. The fact that the trend of alliance with other providers is accelerating over the past six months amid the drastic changes in the business environment of communication carriers is a positive move for the future market growth," says Toshihiro Mishima, research manager, Communications, IDC Japan.