2003 Worldwide IT Benchmark Report

m e t a g r o u p . c o m

Summary of Results

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2003 Worldwide IT Benchmark Report

Contents
I. The Year In Review ..................................................................... 1 II. Highlights of the 2003 Worldwide IT Benchmark Report ....... 5 III. Overview of Results ................................................................. 10
Data Collection ................................................................................................................................... 10 IT Priorities .......................................................................................................................................... 12 Outsourcing and External Consultants ......................................................................................... 14 Productivity and Support Rates ...................................................................................................... 17 Defects and Quality ........................................................................................................................... 20 Work Breakdowns .............................................................................................................................. 20 Programming Languages ................................................................................................................... 23 Process, Tools, and Techniques ......................................................................................................... 24 Development and Target Application Environments .................................................................. 28 Human Resources .............................................................................................................................. 32 Metric Usage ........................................................................................................................................ 39 Results From Project Data ............................................................................................................... 40

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2003 Worldwide IT Benchmark Report

I.

The Year In Review

From terrorist attacks to corporate executive arrests, 2002 has been a year of tremendous turmoil. The effects of world events and economic recession have taken a substantial toll on both business and IT. Morale is low and confidence in the economy is shaky, making CIOs pessimistic. Just like their colleagues in the boardroom, CIOs are hesitant to make major investments in such uncertain times. In this years 2003 Worldwide IT Benchmark Report (2003 WWB), we see the effects of the economic hard times reflected in IT spending, practices, and performance. In our sample group of technology leadership companies, we have seen a very small increase in IT spending in 2002 (see Figure 1). We do not expect any significant change before the end of the year.
Figure 1 IT Budget as % of Gross Revenue: Average for All Respondents (Last 12 Months)
10%

8%

6% 3.95% 4% 4.01% 2% 3.06% 3.22% 3.31% 2.97% 3.55% 3.41% 3.30% 3.54% 3.59% 3.46% 3.21% 3.33%

0% Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02

Our more general sample of companies, cross-industry, shows similar results, with an average over 2002 of 3.61% (IT as a percentage of gross revenue). The projected growth to the end of the year is flat or slightly negative. The industries showing the largest negative change in IT spending since early 2001 are information technology (-22%), electronics (-13%), consumer products (-12%), and financial services (-10% see Table 1).

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2003 Worldwide IT Benchmark Report

Table 1 IT Spending by Industry
Average of IT Spending Change in $ 2001-2002 -22.22% -13.56% -12.19% -10.94% -7.49% -7.28% -5.47% -4.38% -4.00% -2.44% -2.05% -1.31% -1.20% -0.09% 0.25% 1.32% 1.72% 2.62% 3.39% 6.54% 10.04% -3.08%

Industry Information Technology Electronics Consumer Products Financial Services Construction and Engineering Transportation Energy Telecommunications Utilities Media Chemicals Metals/Natural Resources Manufacturing Retail Banking Professional Services Food and Beverage Healthcare Insurance Pharmaceuticals Hospitality and Travel Overall

CIOs are operating with limited budgets and are working to make the most out of past investments. Our results indicate an increase in spending for infrastructure, hardware purchasing, and security software, with little change or decreases in other areas. We saw a substantial jump in security software investment since September 11, and that higher level has become the norm. In November 2001, 67% of our respondents spent 0%-5% of their IT budget on security, and 33% spent 5% or more. This was a substantial increase from earlier in the year when we ran the same survey and found 82% spent 0%-5% on security, and only 18% spent more than 5%. Our most current results (see Figure 2) are similar to Novembers findings.

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2003 Worldwide IT Benchmark Report

Figure 2 What % of Your IT Budget Is Dedicated to Security?
More Than 10% 8% Less Than 1% 24%

6%-10% of Budget 15%

5% of Budget 18%

1%-2% of Budget 17%

4% of Budget 5%

3% of Budget 13%

CIOs tell us the reason spending is so tight this year is because of weak profits. A substantial number say that IT infrastructure and capacity are currently sufficient, so only limited spending is required. A smaller group points to the poor economy and anxiety over Wall Street and the corporate scandals. In general, however, there is optimism that, by the end of the year and into early 2003, investing will increase. One very positive trend this past year has been evidence of the payoff from IT spending on the bottom line of our technology leadership companies.We have long believed that commitment to IT, in both IT budgets and effective management, should translate into a companys bottom line and market value.Two years ago, to provide a tangible measure of this relationship between IT spending and market value, we started tracking an imaginary investment of $1,000,000 in a portfolio of top IT spenders among Global 2000 organizations, across several sectors. The results of the Technology Leadership Index (TLI) for the past six months are shown in Figure 3.

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2003 Worldwide IT Benchmark Report

Figure 3 Technology Leadership Index vs. DJIA and S&P 500: (Jan.-Dec.)

10%

5%

0%
5/8/2001 6/5/2001 7/3/2001 10/9/2001 11/6/2001 10/23/2001 11/20/2001 12/4/2001 1/2/2001 3/13/2001 3/27/2001 4/10/2001 4/24/2001 5/22/2001 6/19/2001 7/17/2001 7/31/2001 8/14/2001 8/28/2001 9/11/2001 9/25/2001 12/18/2001 1/16/2001 1/30/2001 2/13/2001 2/27/2001

-5%

-10%

-15%

-20%

-25%

-30% Jan. Feb. Mar. Apr. May TLI Jun. Jul. DJIA Aug. S&P 500 Sep. Oct. Nov. Dec.

Even with all the ups and downs on Wall Street, the Technology Leadership Index companies consistently outperform those in both the S&P 500 and the Dow Jones Industrials. Sound IT investment and management have a major impact on the bottom line.

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2003 Worldwide IT Benchmark Report

II.

Highlights of the 2003 Worldwide IT Benchmark Report

IT spending (as a percent of gross revenue) has remained relatively stable through 2001 and most of 2002. Spending has increased in infrastructure development, hardware purchasing, and security software. The biggest cutbacks have been in staffing.

The number-one priority in the US (which is number-two worldwide) is reducing costs.With level or shrinking budgets, this is one of the only ways to have some extra funds for investment. Stability is the watchword this year. We are noticing stability in many areas in 2003 WWB.This trend could be explained by the flat IT spending during the last two years and by the lingering economic recession. The trends in work profiles (i.e., the distribution of effort in IT organizations) show an increase in both new development and package usage, with a decrease in maintenance/support. In 2002, there was a 3% increase in effort in new development, a 2% increase in package work, and a 3.7% decrease in maintenance/support.

We are seeing a slight increase in the use of consultants and external contractors in both US and non-US companies. Last year, companies spent on average 10.5% of their total IT budget on these resources. This year, 10.7% of the total IT budget is going toward outsourced personnel. During the past year, there has been an increase in outsourcing for strategy/ planning and in systems integration, with a significant decrease in application development outsourcing.

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2003 Worldwide IT Benchmark Report

What are companies outsourcing? 17.4% of participants have outsourced their data centers. 46.4% have outsourced some application development. 10.1% have outsourced their help desks. 17.4% have outsourced some maintenance work.

Worldwide average new development size at 9.3 KLOCs is stable this year. The average US company supports 126 KLOCs per professional, which is a considerable jump up from 50 KLOCs per professional last year.Worldwide, we see a similar trend: last year, the support rate was 58 KLOCs per professional, and this year, it jumped up to 100.77 KLOCs. Given that portfolio size has remained stable while staff has been cut, we can see why such increases are occurring.

New development productivity was stable this year. Worldwide and US new development productivities are both around 35 KLOCs per professional per year, which is similar to last year.

In the US, we see a decrease in quality while non-US companies have improved. Defect density rates in the US this year have gone back up to the level they were at in the late 1990s. The US post-release defect rate is now 0.53 per KLOC, up from 0.31 last year.The non-US post-release defect rate is now 0.42 per KLOC, down from 0.47 last year.

C++ and Java continue to make a strong showing as the programming languages of choice this year. HTML, JavaScript, ASP, and XML are also important languages. Last year, 19.8% were developed in C++, and 15.9% were developed in Java. This year, 18% were developed in C++, and 16.8% were developed in Java. In addition, 12.7% were developed in HTML, JavaScript, ASP, or XML, up from 9.7% last year. Development productivity average for C++ in KLOCs is 4,167 LOC per month, per person. The standard for our surveys is around 25 hours per week actual coding time, which gives us 100 hours per month, and 4,167 / 100 = 41.67 LOC per hour. For Java, the average in LOC per month, per person is 6,210, giving 62.1 LOC per hour. Defects are as follows: for C++, 0.552 defect/KLOC, and for Java, 0.539 defect/KLOC.
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2003 Worldwide IT Benchmark Report

Software process assessments have dipped in US companies and have remained at a stable level in non-US companies. ISO 9000 certification was up in both US and nonUS companies. Last year, 43.8% of US companies and 41.0% of non-US companies had done formal assessments. This year, 38% of US companies and 41.2% of non-US companies have done formal assessments. Last year, 16.2% of US companies and 32.67% of non-US companies had been ISO 9000 certified.This year, 21.6% of US companies and 33.2% of non-US companies have gone through the process.

Metrics usage is up from last year. Last year, 51.2% of US companies used metrics, and 53.3% of non-US companies used them. This year, 58% of US companies used metrics, and 62% of non-US companies used them. Most companies that do collect metrics do so weekly. The average company has five to six people collecting metrics.

Networked workstations continue to be the tool of choice, showing the most penetration and the highest value. Fourth-generation language (4GL) tools and Unified Modeling Language (UML) showed an increase in usage over last year.

The emphasis for development effort continues to be client/server environments, with mainframe development coming in second. Not surprisingly, applications designed to run on networked workstations (which include client/server) are becoming more prominent, with mainframe-based applications continuing to decrease in the US from 33% (2000) to 31% (last year) and down to 27% this year.

Windows (particularly NT) continues to be the development platform of choice. The predominant development environment is networked workstations in the desktop Pentium class. More than half of worldwide participants are using a

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2003 Worldwide IT Benchmark Report

Windows-based operating system on these computers, with a strong showing of IBM MVS. Sun Solaris has also increased from last year. We have encountered these same findings for four years now. Metrics specialists and analysts are the most difficult positions to fill worldwide. Turnover rates for IT staff remain significant in both the US and worldwide. US turnover is at 11.8%, up from 9.9% last year. Worldwide turnover is at 11.8%, up from 10.6% last year. The country with the highest turnover rate is Chile. Canada and the Netherlands have the lowest turnover rates. These higher-than-expected turnover rates in the context of the economic slowdown or recession are partly explained by an exodus of workers from IT to other areas.

The IT work year is decreasing in length. With one of the highest priorities worldwide being the reduction of costs, it is not surprising to find a shorter working year and shorter working hours. Compensation in the US is down this year, ranging from $3,000 to $10,000 in annual salaries (dependent on position). Typically, bonus awards, merit increases, etc. have evaporated, except for hot-skill areas. In addition, with the increased supply in the job market, hiring companies can take their pick and pay lower salaries for those that they do hire. We are seeing more scrutiny on IT training spending. In the US, according to our latest benchmark data, the average number of training days reported by our respondents is 8.2, compared to 8.5 reported by our respondents last year. Worldwide, the average number of training days is 8.9, compared to 9.02 last year.

Last year was the first time that the US staffed at a higher degree level than elsewhere in the world.The trend up until last year had been the opposite.This year, nonUS companies are again staffing at a higher level, but not by much (see Table 2).

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2003 Worldwide IT Benchmark Report

Table 2 Percentage of Workforce at Education/Training Level

Ph.D. Masters Bachelors Tech School No Formal

US 8.3% 13.4% 40.7% 19.7% 17.9%

Non-US 3.7% 21.29% 37.6% 21.7% 15.72%

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2003 Worldwide IT Benchmark Report

III. Overview of Results

Data Collection
Data was collected via survey from 34 countries and more than 24 industry sectors.This data was combined with other sources, including the Worldwide Benchmark database, which contains detailed, quantitative survey data collected on an ongoing basis from a panel of more than 25,000 IT professionals. The greatest response came from the US (71%), with Canada coming in second (see Figure 4).
Figure 4 Participant Distribution

Australia Austria Belgium Brazil Canada Chile China Colombia Costa Rica Denmark Finland France Germany Greece Hong Kong India Ireland Israel Italy Mexico Netherlands New Zealand Norway Philippines Portugal Singapore South Africa South Korea Spain Sweden Switzerland United Kingdom United States Non-US US

1.6% 0.2% 0.3% 0.8% 4.0% 0.3% 0.1% 0.1% 0.0% 0.1% 0.3% 0.9% 1.7% 0.1% 0.3% 1.6% 0.2% 0.6% 0.6% 0.5% 0.9% 0.1% 0.4% 0.9% 0.3% 0.6% 0.8% 0.6% 0.9% 0.2% 0.8% 2.8% 71.0% 29.0% 71.0% 0% 10% 20% 30% 40% 50% 60% 70% 80%

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2003 Worldwide IT Benchmark Report

We received the most responses from information technology, professional services, and government (see Figure 5).

Figure 5 Distribution of Participants by Industry

Aerospace Banking Chemicals Construction and Engineering Consumer Products Defense Education Electronics Financial Services Food/Beverage Processing Government Healthcare Information Technology Insurance Manufacturing Media Metal/Natural Resources Miscellaneous Pharmaceuticals Professional Services Retail Telecommunications Transportation Utilities 0%
1.2% 3.5% 1.7% 2.6% 1.7% 0.3% 5.3% 1.5% 8.9% 3.3% 31.3% 4.1% 5.4% 0.7% 7.8% 2.4% 0.7% 1.2% 1.0% 0.8% 2.4% 1.0% 6.4% 4.6%

5%

1 0%

1 5%

2 0%

2 5%

3 0%

3 5%

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2003 Worldwide IT Benchmark Report

Most respondents provided us with tools and techniques, software process, and lifecycle data. Data was most scarce in the areas of portfolio and defects (see Figure 6).

Figure 6 Percent of Participants With Data

120%
93% 88% 83%

86.3% 84.3% 80% 93% 82%

84% 78%

76.4% 76.9% 70% 78% 69%

80%

65.2%

69%

50.4% 50%

51%

46.6% 40.5% 50% 32% 29%

47.8%

46%

33% 29%

24.8%

0% Breakdown Tools and Portfolio Size Portfolio Change Work Profile Maintenance Productivity Techniques Defect Data Life Cycle Data SEI

8.1% 11.6% 13%

20%

14.0%

30%

40%

1998

1999

2000

2001

IT Priorities
No surprise here: The number-one priority is reducing costs. With stable or shrinking budgets, this is one of the only ways to have some extra funds for investment. The top five IT priorities for US companies are: 1. Reduced costs 2. Business alignment 3. Increased productivity 4. Project management 5. Improved software quality

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41% 36%

2002

38.8%

50%

60%

55.9%

63.4%

75.2% 69%

78%

100%

90.9%

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2003 Worldwide IT Benchmark Report

This is the first time that business alignment has appeared in the top five IT priorities. Is business alignment perceived as more important during hard financial times than during an upswing? If a company is struggling, all its resources are called on to help it survive. During good times, business is booming and appears to be self-sufficient, so IT can work on its own goals. Business alignment should always be a high priority for IT. Hopefully, the groundwork for closer business relationships will be laid this year and will be maintained in the years to come. The lowest priorities in US companies are recruiting staff and business process reengineering. Many IT organizations have reduced staff during the past year. The ITAA workforce study (http://www.itaa.org/workforce/studies/02execsumm.pdf) revealed that the US IT workforce experienced a net loss of more than 500,000 workers during a 12month period. Companies hired 2.1 million IT workers during the year, but also dismissed 2.6 million IT workers. This was not a good year to be looking for a new IT position. The primary IT priorities for non-US companies are: 1. Increased productivity 2. Reduced costs 3. Business alignment 4. Improved software process 5. Improved software quality As in the US, cost reduction is an important priority, but it is second to increasing productivity. These two factors often appear together, because an increase in productivity often does help to reduce costs. The lowest priorities for non-US companies are the same as in the US: recruiting staff and business process re-engineering (BPR). BPR has been a low priority for several years now. It was an important tool in the early and mid-1990s, but has since lost favor. BPR still holds promise for understanding business processes and their subtle interrelationships; however, it can be a complex undertaking, and the learning curve can be long for implementing it.

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2003 Worldwide IT Benchmark Report

Outsourcing and External Consultants
IT organizations often use external resources to augment and sometimes replace internal resources. Such external resources include consultants, contractors, packaged solutions, and outsource providers. The average results for the past two years appear in Table 3:

Table 3 Average Results

% of Total Consulting Spend

Re-Engineering/ Performance Improvement 14% 14%

IT Strategy and Planning 13.5% 17.1%

Systems Integration 13.7% 19.9%

Application Development 35.2% 26.9%

Systems Maintenance 23.6% 22.1%

2001: All 2002: All

We are seeing a slight increase in the use of consultants and external contractors in both US and non-US companies. Last year, companies spent, on average, 10.5% of their total IT budget on these resources. This year, 10.7% of the total IT budget is going toward outsourced personnel.With the spending cutbacks we have experienced during the past two years, it is not surprising there is little change in this area. During the past year, there has been an increase in outsourcing in strategy/planning and systems integration. Our results indicate a significant decrease in application development. A possible explanation for this is that, with the cutbacks in staff, there has been a corresponding cutback in software development and production. It is not unusual for IT organizations to focus on internal reorganization and strategy, as opposed to creating new products during difficult times. The use of packaged solutions continues to rise significantly. Last year, 31.37% of portfolios, on average, consisted of packaged software. This year, we are up to 43.78% (see Figure 7).

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2003 Worldwide IT Benchmark Report

Figure 7 Average % of Portfolio Consisting of Packaged Software: All Participants
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999 2000 2001 2002 32.18% 22.27% 31.37% 43.78%

In terms of packages being used in development work, the percentage for US companies has decreased from 41.4% to 40.2%; in non-US companies, 45.9% of development work consists of packaged software, up from 42.4% last year (see Figures 8 and 9).

Figure 8 Average % of New Development Consisting of Packaged Software: US

100% 90% 80% 70% 60% 50% 40% 30% 22% 20% 10% 0% 1998 1999 2000 2001 2002

43.1% 34.8%

41.4%

40.2%

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2003 Worldwide IT Benchmark Report

Figure 9 Average % of New Development Consisting of Packaged SW: Non-US
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1998 1999 2000 2001 2002

52.2% 45.9% 42.1% 41.5% 42.4%

The amount of new development being done by external contractors and outsource providers has remained stable for two years now, after a decrease in early 2001. The number of contractors declined in 2001 and appears to have leveled off. Last year, the worldwide percentage was 35.4%, but this year, it increased slightly to 35.9% (see Figure 10).
Figure 10 Average % of New Development Software Developed by External Contractors/Outsource Providers: All Participants
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999 2000 2001 2002 46.6% 38.5% 35.4% 35.9%

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2003 Worldwide IT Benchmark Report

Outsourcing continues to play a significant role, particularly in application development. This is the third year we have seen a trend toward application development outsourcing. In earlier years, the focus was on data center and operations (see Figure 11).
Figure 11 Percent of Participants Outsourcing Each
14.8% 17.2% 8.7% Application Development 8.6% 10.3% 4.3% Network Management 14.8% 12.1% 21.7% 17.3% 17.2% 17.4% 14.8% 15.5% 13.0% 7.4% 6.9% 8.7% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 22.2% 20.7% 26.1%

Data Center

Help Desk

All US Non-US

Application Maintenance

Single Application

Business Process

0.0%

Productivity and Support Rates

New development productivity is normally measured in line-of-code (LOC) production rates or function points. For three years now, we have received very little function point data. By far, the majority of our respondents report only LOCs. Function points are more difficult and timeconsuming to count than LOCs. Until we see more interest in the advantages of using meaningful size and productivity measures, LOCs will probably continue to be the norm. New development productivity was stable this year. Worldwide and US new development productivities are both around 35 KLOCs per professional per year (see Figure 12), which is similar to last year. We are noticing stability in many areas in 2003 WWB. This trend could be explained by the flat IT spending during the last two years, and the lingering economic recession.
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2003 Worldwide IT Benchmark Report

Figure 12 Average New Development Productivity (KLOC/Professional per Year)
250 220.78 200 220.78 90 80 70 Maximum 150 Average 60 50 100 34.14 50 26.08 20 10 1 All US Non-US 0 37.51 77.78 30 40

Worldwide average new development size (KLOC) is stable this year too.There was a significant jump last year, which we see maintained this year (see Figure 13).We reported in last years analysis that the introduction of powerful development tools in recent years, and the explosion of Web-based applications, resulted in more code being written than ever before.
Figure 13 Average New Development Size (KLOC): All Participants
10,000 8,000 6,000 4,000 2,000 0 1999 2000 2001 2002 9,200 9,300

5,100 3,400

The average US company supports 126 KLOCs per professional, which is a considerable jump up from 50 KLOCs per professional last year. Worldwide, we see a similar trend: last year, the support rate was 58 KLOCs per professional, and this year, it jumped up to 100.77 KLOCs (see Figures 14 and 15). Given that portfolio size has remained stable while staff has been cut, we can see why such increases are occurring.
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2003 Worldwide IT Benchmark Report

Figure 14 Portfolio Size (KLOC) Versus Maintenance Staff: US Participants
10,000 9,000 8,000 Thousands of KLOCs 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 0 10 20 30 40 50 60 70 80 90 100 Maintenance Staff

Figure 15 Portfolio Size (KLOC) Versus Maintenance Staff: All Participants

20,000 18,000 16,000 Thousands of KLOCs 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1 21 41 61 81 Maintenance Staff

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2003 Worldwide IT Benchmark Report

Defects and Quality
The measure we use to quantify quality is defects per KLOC (see Table 4).

Table 4 Post-Release Defects per KLOC

All 1998 0.48 US 1998 0.57 Non-US 1998 0.46 1999 0.48 2000 0.47 2001 0.47 2002 0.42 1999 0.51 2000 0.54 2001 0.37 2002 0.53 1999 0.47 2000 0.47 2001 0.36 2002 0.46

In the US, we see a decrease in quality, while non-US companies have improved. Defect density rates in the US this year have gone up to the level they were at in the late 1990s, making 2001 an unusual year.A possible explanation for this is the higher-than-usual number of IT companies that provided data for last years WWB. Their defect rates are significantly lower than our usual set of companies.

Work Breakdowns
In what phases do IT professionals spend most of their time (see Table 5)?
Table 5 Percentage of Life Cycle Effort: All Respondents
1997 Definition Analysis Design Coding System/Integration Test Acceptance Test Documentation Implementation Support 16.1 17.7 32.2 17.5 7.2 9.4 1998 16.7 17.2 32.5 17.4 7 9.3 1999 17.8 16.3 31.8 17.2 6.6 10.1 2000 17.6 16.5 32.2 17.3 7.1 9.3 2001 6.4 19.7 17.1 27.0 17.2 4.8 5.9 13.1 5.8 2002 10.0 13.1 15.8 23.0 10.3 6.7 5.4 7.1 8.5

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2003 Worldwide IT Benchmark Report

(Note: In 2001, we began collecting data on three new phases: Definition, Acceptance Test, and Support. Data for these phases was not available in previous years.) This year, we continue to see a decrease in the amount of time spent coding and an increase in the earlier phases of the life cycle, which is a good trend.The more time spent in the upfront activities almost always results in a shortened life cycle for the project. What kinds of projects are being done? The worldwide focus is on new development (32%) and maintenance (26%). Package work is on the rise at 30% for package installation and modification, up from 28% last year (see Figure 16).
Figure 16 Current Work Breakdown: All Participants
Maintenance 26% New Development 32%

Package Modification 13% Package Installation 17%

Migration 12%

In the US, the emphasis in maintenance and support work is on fixes and repairs (24%), with an even distribution among new functionality (19%), upgrades (19%), and improvements (18% see Figure 17).

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2003 Worldwide IT Benchmark Report

Figure 17 Current Maintenance/Support Breakdown: US
Other 19%

Fixes/Repairs 24%

Upgrades 18% New Functionality 20% Improvements 19%

In non-US companies, the emphasis is on fixes and repairs (27%), with less emphasis on upgrades (see Figure 18).

Figure 18 Current Maintenance/Support Breakdown: Non-US

Other 19%

Fixes/Repairs 27%

Upgrades 16%

New Functionality 19% Improvements 19%

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2003 Worldwide IT Benchmark Report

Programming Languages
For two years now, we have seen an increase in the use of C++ and Java in our reporting companies, though less in the US than worldwide. Web programming languages are also popular. In the US, we see a much larger usage of COBOL than elsewhere in the world. During the last three years, COBOL usage has leveled off at about 11.5% in US companies, but has decreased significantly in non-US companies.Y2K provided the opportunity to move to new languages, but it appears US companies took less advantage of this than non-US companies.Visual Basic and Oracle/SQL-based languages are also making a strong showing (see Figure 19).

Figure 19 Language Use Summary Composition

18.0% 18.4%

18% 16% 14% 12% 10% 6.7% 7.0% 5.6% 8% 6% 4% 2% 0% 4GL Ada C

14.2%

11.6%

13.6% 13.5% 13.9%

16.7% 17.4% 10.9%

20%

9.8% 9.7% 10.5%

6.7% 6.5% 7.9%

9.2% 9.5% Other 7.1%

3.7%

3.9% 3.1%

3.4%

0.7% 0.4%

0.6%

C++

COBOL

Java HTML/ JavaScript/ ASP/XML

Oracle Perl/CGI

2.1% 2.2% 1.9%

SAP

2.6% SQL

6.0% 5.9% 6.7% Visual Basic

6.1% 6.4%

All

US

Non-US

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2003 Worldwide IT Benchmark Report

Process, Tools, and Techniques
Software process assessments have dipped in US companies, and remained at a stable level in non-US companies (see Figures 20 and 21).

Figure 20 Formal Assessment Performed (SEI): US % Responding Yes

70% 65% 60% 58% 56% 62%

50% 42% 40% 35% 44% 38%

30%

20%

10%

0% Yes 1999 2000 2001 No 2002

Figure 21 Formal Assessment Performed (SEI): Non-US % Responding Yes

70% 58% 68% 59% 59%

60%

50% 42% 40% 32% 30% 20% 41% 41%

10%

0% Yes 1999 2000 2001 No 2002

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2003 Worldwide IT Benchmark Report

The majority of assessments that were performed took place in the aerospace and telecommunications sectors. ISO 9000 certification is up in both US and non-US companies (see Figure 22).

Figure 22 ISO 9000 Certification (% of Participants): All Participants

80% 70% 60% 50% 40% 30% 20% 10% 0% Certified 1999 2000 21% 20% 21%

79% 80% 79% 75%

25%

Not Certified 2001 2002

A possible explanation for this decrease in interest in SEI assessments could be the need to reduce costs (which is a top-five priority for both US and non-US companies) and staffing cutbacks. It takes time and money to perform assessments. The increase in ISO 9000 certified companies may be related to our sample of companies this year, which has a larger-than-usual proportion of electronics and telecomm companies. The majority of our respondents are at SEI Level 2 (see Figure 23). This is the first year we have a majority of companies above Level 1. We are also seeing more and more companies in the upper levels.

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2003 Worldwide IT Benchmark Report

Figure 23 SEI Results: % of Those Responding

Level 5

4.5% 5.3% 2.9% 10.9% 10.5% 11.8% All

Level 4

Level 3

20.9% 22.4% 17.6%

US Non-US

Level 2

42.7% 43.4% 41.2%

Level 1

20.9% 18.4% 26.5% 20.0% 40.0% 60.0% 80.0% 100.0%

0.0%

With the emphasis on object-oriented and Web technologies, we see some trends in tool usage from last year. Figures 24 and 25 show the percentage of respondents using a particular tool, as well as the value rating they place on each tool.

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2003 Worldwide IT Benchmark Report

Figure 24 Tool and Technique Usage: Percent Using (All Participants)
Methodology Design Automation Code Generators Reuse of Code Reuse of Design Object-Oriented Tools SW QA Group Process Group Walk-Throughs/Inspections Test Data Generators Software Metrics Estimation Tools Project Management Tools Client/Server Development Networked Workstations Structured Methods Information Engineering 4GL Tools Process Simulation Business Process Re-Engineering Data Modeling UML XML Component Code 0% 10% 20%
51.6% 31.9% 29.6% 39.6% 42.0% 42.6% 50.1% 40.9% 47.8% 30.1% 37.5% 26.2% 45.6% 50.8% 82.3% 49.1% 32.7% 55.6% 24.9% 31.8% 43.9% 35.1% 39.1% 37.7%

30%

40%

50%

60%

70%

80%

90%

Figure 25 Tool and Technique Usage: Value Rating (All Participants)

Methodology Design Automation Code Generators Reuse of Code Reuse of Design Object-Oriented Tools SW QA Group Process Group Walk-Throughs/Inspections Test Data Generators Software Metrics Estimation Tools Project Management Tools Client/Server Development Networked Workstations Structured Methods Information Engineering 4GL Tools Process Simulation Business Process Reengineering Data Modeling UML XML Component Code 0.0 0.5 1.0 1.5 2.0 3.6 2.9 2.7 3.6 3.5 3.4 3.5 3.1 3.4 3.1 3.1 2.5 3.3 3.4 3.9 3.4 2.8 3.9 2.5 3.1 3.6 3.0 3.6 2.9 2.5 3.0 3.5 4.0 4.5

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2003 Worldwide IT Benchmark Report

As we have seen for several years now, the most popular tool is the networked workstation, with a penetration of 82.3% and the highest value rating of 3.9 (on a scale of 0 to 5). Next are 4GL tools, with a penetration of 55.6% and a value rating of 3.9. In comparison to last years tool usage, we see a growth in interest in UML and object-oriented development.

Development and Target Application Environments

In this section, we review the findings on both development environments and the environments where applications are designed to run. The predominant development environment is networked workstations in the desktop Pentium class (see Figure 26). More than half of worldwide participants are using a Windows-based operating system on these computers (see Figure 27), with a strong showing of IBM MVS. Sun Solaris has also increased from last year. We have encountered these same findings for four years now.

Figure 26 Application Development Hardware Platforms

100% 90% 80% 70% 60% 50% 40% 1 0.4% 1 2.8% 30% 5.3% 4.3% 1.8% 4.0% 1.8% 5.9% 6.3% 20% 10% 0% Desktop Pentium Class IBM VAX Servers (Unix) US Mainframe Laptops 7 8.6% 8 9.3% 7 2.2%

1.3% 0.9%

1.6%

1.3% 0.0%

All

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2.1%

Non-US

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2003 Worldwide IT Benchmark Report

Figure 27 Application Development Software Platforms

31.8%

31.3%

31.2%

30.6%

30%

25%
18.3% 18.4% 18.2%

20%

15%
9.4% 9.4% 9.1%

6.1%

6.0%

10%

6.8%

2.5%

2.6%

0% HP-UX IBM AIX IBM MVS IBM OS/400 Microsoft Windows 95+ All US Microsoft Windows NT Non-US Sun Solaris

The application operating environment is mostly client/server, with mainframe applications coming in second (see Figure 28). Not surprisingly, applications designed to run on networked workstations (which include client/server) are becoming more prominent, with mainframe-based applications continuing to decrease in the US from 33% (2000) to 31% (last year) and down to 27% this year.

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1.8%

2.1%

5%

2.3%

30.3%

35%

31.8%

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2003 Worldwide IT Benchmark Report

Figure 28 Distribution of Development Effort (Percent)
33.8% 33.5% 33.4% 29.9% 28.4% 27.9% 30.9% 28.8% 26.7% 25.8% 28.1%

35%

30%

25%
20.2% 19.4% 19.1% 21.2%

20%

15%

10%

5%

0% Mainframe Apps or Products PC/Workstation Apps or Products Client/Server Apps Systems/ Network Products Non-US Other

All

US

With this focus on networked workstations, it is not surprising that the primary internal communication is e-mail (see Figure 29), with 80.8% of companies worldwide using it. This is a 22.6% increase in two years.

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2003 Worldwide IT Benchmark Report

Figure 29 Primary Internal Communication

90% 84.1% 80.8% 80% 75.2% 70%

60%

50%

40%

30%

20%

14.2%

18.6%

11.6% 10% 6.2% 3.3% 0% All E-Mail All E-Mail/Voice US Voice 1.6% 1.3% 2.1% 0.3% 0.5% Fax/E-Mail Non-US Not Available

Worldwide, companies anticipate large growth in network bandwidth, server, and storage capacities. Again, the focus on networked and distributed computing is evident (see Figure 30).
Figure 30 % Increase Anticipated Next Year
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Storage Capacity All Network Bandwidth US Server Capacity Non-US

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2003 Worldwide IT Benchmark Report

Human Resources
In early 2002, we ran a series of surveys to determine if companies were cutting IT staff, and to what extent. Of our respondents, 47.6% said they had cut staff, with the majority making cuts of 10%-15%. Our findings agreed with some of the results of the ITAA annual workforce report released in May 2002.The most important findings in the ITAA report were: The 10.4 million-member IT workforce that ITAA measured in 2001 fell by 5% to 9.9 million workers in early 2002. In aggregate terms, the US IT workforce experienced a net loss of 528,496 workers during a 12-month period. Companies hired 2.1 million IT workers during the year, but also dismissed 2.6 million IT workers. IT firms lost 15% of IT workers, while non-IT companies dropped 4% during the same period. Despite the grim numbers, hiring managers in the ITAAs survey said they expect to create about 1.1 million IT jobs within the next year. But due to a so-called skill imbalance, they expect about 600,000 of those jobs to remain unfilled. (ITAA Executive Summary, Bouncing Back: Jobs, Skills and the Continuing Demand for IT Workers, http://www.itaa.org/workforce/studies/02execsumm.pdf.) The ITAA report sparked considerable controversy. One factor fueling the conflict over the study was that the ITAA is one of the nations biggest supporters of the H-1B temporary foreign visa program. Some critics charged that the skill shortage reported in the ITAA study was just an attempt to persuade Congress to raise the H-1B cap and flood the IT job market with lower-paid foreigners to drive down salaries. We conducted our own surveys to see if our member companies were experiencing a skill shortage.The results are in Figure 31. In general, our respondents do not agree with the ITAA finding that there is a skill shortage.

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2003 Worldwide IT Benchmark Report

Figure 31 Are You Experiencing a Skill Shortage in Your IT Organization?
Yes 16%

Somewhat 22% Not at All 62%

In those organizations that are hiring, it is easiest to acquire systems and network analysts in the US, and most difficult to acquire metrics and testing personnel (see Table 6).

Table 6 US Ranking: Ease of Acquisition 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Systems Analyst Network Analyst/Architect Web Specialist/Designer Systems Designer/Architect Systems Administrator Development Programmer Database Analyst Documentation/Training Project Leader Support Programmer Business Analyst QA Specialist Metrics/Process Specialist Test Engineer

The ease in finding Web and network experts might reflect the availability of staff laid off due to Internet-based company failures. The difficulty in finding metrics people is a supply/demand issue. Little demand for metrics people creates a small supply.

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2003 Worldwide IT Benchmark Report

In non-US companies, the rankings are consistent with last years findings. Database analysts and support programmers are easy to find, and analysts are most difficult to find (see Table 7).
Table 7 Non-US Ranking: Ease of Acquisition

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Documentation/Training Support Programmer Database Analyst Metrics/Process Specialist Web Specialist/Designer QA Specialist Test Engineer Systems Designer/Architect Network Analyst/Architect Systems Administrator Project Leader Development Programmer Business Analyst Systems Analyst

Turnover rates remain significant in both the US and worldwide (see Table 8).
Table 8 Annual Turnover Rates

All 1998 10.7% US 1998 10.1% Non-US 1998 11.4% 1999 9.0% 2000 12.6% 2001 11.4% 2002 11.7% 1999 8.0% 2000 10.2% 2001 9.9% 2002 11.8% 1999 9.0% 2000 11.4% 2001 10.6% 2002 11.8%

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2003 Worldwide IT Benchmark Report

These higher-than-expected turnover rates, in this context of economic slowdown or recession, are partly explained by an exodus of workers from IT to other areas. Our recent survey corroborates this finding (see Figure 32).
Figure 32 Have You Considered Leaving IT Due to the Current Job Market?

38% No

Yes 62%

The rankings of turnover rates from highest to lowest appear in Table 9.

Table 9 Turnover Rates
Chile India Italy US Canada Netherlands 19.3 13.1 13.0 11.8 5.0 4.7

According to the Global Technology Index (http://www.metricnet.com/specials/GNEImain.html), Chiles high turnover rate may relate to its high marks in the knowledge jobs category, ranking 12th of 52 countries. Knowledge jobs are positions that tend to be informationand/or engineering-related, and require a need for qualified senior management. The job market in Chile is booming, unlike other areas of the world. India has always had a high turnover rate (it was number one in 2001 and number two in 1999). India has sufficient IT resources, but it has trouble holding on to them due to its serious social and economic problems.

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2003 Worldwide IT Benchmark Report

The IT work year is decreasing in length. With one of the highest priorities worldwide being the reduction of costs, it is not surprising to find a shorter working year and shorter working hours (see Table 10).

Table 10 Working Hours per Year

All Average US Average Non US Average 1999 1,564 2000 2,138 2001 1,883 2002 1,843 1999 1,441 2000 2,157 2001 2,080 2002 1,992 1999 1,503 2000 2,151 2001 1,992 2002 1,948

Compensation in the US is down this year, ranging from $3,000 to $10,000 in annual salaries, depending on position. Typically, bonus awards, merit increases, etc. have evaporated, except for hot-skill areas. In addition, with the increased supply in the job market, hiring companies can take their pick and pay lower salaries for those that they do hire. We are seeing more scrutiny on IT training spending (see Table 11).
Table 11 Training Days Per Year

2002 Worldwide US Non-US

8.9 8.2 9.4

2001
9.0 8.5 9.6

2000
8.4 8.0 8.7

1999
7.25 7.3 7.2

1998
7.9 7.4 8.4

Training days vary somewhat by job title (see Figure 33). As we would expect this year, network-related positions and programmers are getting the most training.

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2003 Worldwide IT Benchmark Report

Figure 33 Staff Training Days per Year

13.9

14.0

16 13.1 14 10.5 10.2 12 8.9 8.1 10 8 6 4 2 0 10.7

13.2

10.8

12.1

10.2

10.1 9.5

10.7

9.7

9.8

10.0

9.2 8.3

9.2 8.7

9.0

8.8

8.3 7.4

8.2 7.8 8.7

8.6 7.8

8.9

9.2

9.3 7.5 Systems Administrator 8.0

7.2 6.8 7.9

7.5

7.8

Documentation/Training

Support Programmer

All

US

Non-US

Turning now to the distribution of staff across the 14 job titles in our study (see Figure 34), we see the majority of IT resources consist of development programmers (19.9% worldwide). This is slightly down from last year, when 21.9% of IT resources were development programmers. Next in line come the systems analysts.

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Web Specialist/Designer

Network Analyst/Architect

Business Analyst

Systems Designer/Architect

Database Analyst

Systems Analyst

Metrics/Process Specialist

Project Leader

Test Engineer

Development Programmer

QA Specialist

12.7

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2003 Worldwide IT Benchmark Report

Figure 34 Percent of Current Staff

25% 19.9% 20.5% 18.3%

12.3% 11.9% 13.1 %

13.8% 12.8% 16.4%

20%

11.6% 12.3% 9.5%

10.5% 11.3% 8.5%

8.3% 6.8% 10.8%

15%

11.1% 11.8% 9.6%

11.3% 12.4% 7.2% 8.0% 4.8% 6.9% 8.0% 5.6% 5.0% 5.5% 4.1% 4.0% 4.7% 2.9% 3.9% 4.4% 3.0% 6.7% 6.8% 6.5% Documentation/Training Non-US Systems Administrator Web Specialist/Designer Database Analyst Metrics/Process Specialist Test Engineer QA Specialist 8.6%

10%

5%

0% Support Programmer Systems Designer/Architect Business Analyst Network Analyst/Architect US Systems Analyst Project Leader Development Programmer

All

The educational background of IT professionals is summarized Table 12. Last year was the first time that the US staffed at a higher degree level than elsewhere in the world.The trend up until last year had been the opposite.This year, non-US companies are staffing at a higher level, but not by much.

Table 12 Percentage of Workforce at Education/Training Level

US 8.3% 13.4% 40.7% 19.7% 17.9% Non-US 3.7% 21.29% 37.6% 21.7% 15.72%

Ph.D. Masters Bachelors Tech School No Formal

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2003 Worldwide IT Benchmark Report

Metric Usage
On the WWB survey, we asked the following questions: 1. Are metrics actively used (see Figure 35)? 2. How frequently are they collected (see Figure 36)? 3. How many people are assigned to collect them (see Figure 37)?
Figure 35 Area Metrics Actively Used?
70% 60% 60% 50% 40% 40% 30% 20% 10% 0% All Yes US Non-US No 58%

63%

42% 37%

Figure 36 How Often Are Metrics Collected?

Weekly Monthly Biannually Annually Not at All Not Available 0% 10% 20% 30% 40% 50% 60% 70% 80.0%

All

US

Non-US

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2003 Worldwide IT Benchmark Report

Figure 37 How Many People Are Assigned to Collect Metrics?
6 5.3 5 4 3 2 1 0 All US Non-US 4.4 5.8

Metrics usage is up from last year. Last year, 51.2% of US companies used metrics, and 53.3% of non-US companies used them. This year, 58% of US companies used metrics, and 62% of non-US companies used them. Most companies that do collect metrics do so weekly. The average company has five to six people collecting metrics.

Results From Project Data

This year, we have begun to analyze project data supplied by our member companies.We will begin tracking trends in this area next year. The average cost per function point (in US dollars) by language is shown in Table 13.
Table 13 Cost per Function Point by Language
$69 $44 $11 $17 $19 $9 $5 $7 4GL Ada C C++ COBOL Java Oracle VB

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2003 Worldwide IT Benchmark Report

This analysis indicates there is an advantage to using object-oriented languages over procedural languages. We now have enough projects in C++ and Java to enable us to do some productivity and defect benchmarks: Development productivity average for C++ in KLOCs is 4,167 LOCs per month, per person. The standard for our surveys is around 25 hours per week of actual coding time, which gives us 100 hours per month, and 4,167 / 100 = 41.67 LOCs per hour. For Java, the average in LOCs per month, per person is 6,210, giving 62.1 LOCs per hour. The defect rate for C++ is 0.552 defect/KLOC.

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2003 Worldwide IT Benchmark Report

About the Worldwide IT Benchmark Report
Since 1995, the Worldwide IT Benchmark Report has been the definitive source of IT performance and productivity data for Global 2000 organizations. Each year, data is compiled from the thousands of organizations around the world that are subjects of META Group benchmarking engagements or participants in targeted industry surveys. The result is the most comprehensive and authoritative source on IT spending and performance data in the industry. META Group benchmarking engagements serve as the foundation for our measurement research, enabling us to authenticate data and conduct ongoing sampling of IT spending in the marketplace.The Worldwide IT Benchmark Report analyzes IT spending by industry and delivers key infrastructure metrics organized by tower, such as data center, network, desktop, and help desk. This organizational construct is preferable for analyzing infrastructure investments - where normalizing best in class performance across all industry segments on criteria such as work volume, spending levels, and headcount tends to be more effective. The ultimate resource for conducting internal assessments, the Worldwide IT Benchmark Report delivers comprehensive performance and productivity data to supplement the strategic and tactical guidance provided by META Group analysts and consultants. The report is the only research tool of its kind, enabling organizations to perform thorough self-assessments of IT performance and identify opportunities to better align spending and performance with industry norms. Armed with insights from this report, META Group is able to further help firms undertake: Total Cost of Ownership (TCO) studies to capture costs in areas that have been traditionally difficult to measure (e.g., desktop) or in emerging areas (e.g., storage) where cost management is a concern to business executives Cost Benchmarks that compare your cost and performance against unique peer groups in all infrastructure towers (e.g., data center, desktop, network) Outsourcing Feasibility studies that determine the role of third-party service providers in any performance improvement or cost reduction initiative Measurement Scorecard projects populated with data from the report and your own internal measurement efforts

For more information about the Worldwide IT Benchmark Report or META Groups complete portfolio of measurement solutions, visit us on the Web at www.metagroup.com or call (800) 945 META [6382].

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