The Light at the End of the Tunnel?

By Stan Gibson  |  Posted 2008-09-16 Print this article Print


Bartels said he anticipates budget growth of 4 percent for 2009, but he expects that actual spending growth will be 7 percent due to the economic rebound he expects in the second half of the year. "2009 will start lousy and get better," he said.

Bartels points out that although 2007 was a year of strong IT spending, it was not, strictly speaking, a boom year. "Growth was 7 percent. That's about the same as 2006. It was not 10 percent to 12 percent growth as it was in the late 1990s."

But the upturn that may be coming next year could kick off a period of strong IT spending that could last for years, if an economic model developed by Forrester proves correct.

According to Bartels, since the dawn of the computer age 60 years ago, IT spending has gone through alternating eight-year periods of high investment, during which IT spending has grown twice as fast as the economy, and eight-year periods of restraint, during which IT has grown only at the rate of the economy.

Since 2008 concludes a period of restraint that began in 2001 with the collapse of the dot-com bubble, we're due for an eight-year rebound period, the model predicts.

"Starting around 2009 to 2010, we could see a boom like the ERP boom," Bartels said. Although he is unclear as to the specific technology that will drive increased spending, Bartels suggested that the trend to server virtualization and cloud computing could free up IT dollars that could be invested in new IT initiatives, whether new applications based on service-oriented architecture, widespread use of embedded computing technologies or ballooning storage needs.

IDC's Minton disagreed with Forrester's eight-year cycle theory.

"We don't agree that IT spending will go back to the boom spending we saw in the past ... but the cycle of valleys and peaks will probably continue," Minton said. "Once we get out of the economic downturn in the second half of next year and in 2010, there will be growth of five to six percent. That's really the long-term growth rate."

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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