Saying that the global recession is continuing to fuel cuts in commercial IT budgets and consumer hesitancy to buy, research firm Gartner is lowering its overall worldwide IT spending forecast. Earlier in the year, Gartner predicted a 3.8 percent drop, but now says the decline could hit 6 percent, to $3.2 trillion. Other research firms, including Forrester, also have lowered expectations for 2009. However, like Forrester, Gartner is expecting a rebound of sorts starting in 2010.
Gartner is the latest research firm to lower its projections for IT spending
Gartner analysts July 7 said corporations are continuing to slash IT budgets
in face of the global recession, and consumers aren't yet feeling confident
enough in the future to open up their wallets.
The result is that Gartner, which in January projected that global IT
spending would decline 3.8 percent in 2009, is now saying that it should fall
by as much as 6 percent.
Overall, IT spending will hit $3.2 trillion, a drop from the $3.4 trillion
spent in 2008, according to the research firm.
Gartner analyst Richard Gordon said that the hardware and software segments
of the market have stabilized and that any downward revisions in forecasts for
those areas are minor.
"However, the full impact of the global recession on the IT services
and telecommunications sectors is still emerging, and forecast growth in these
areas has been further reduced significantly," Gordon said in a statement.
Exacerbating that is the current movement in the exchange rates, where the
value of the U.S. dollar is rising against most other currencies, which also
will negatively impact IT spending.
All areas of the industry will experience decline-something that didn't
happen in the economic downturn of 2001-with the hardware segment being hit the
hardest, at a projected 16.3 percent decline. Software will see a 1.6 percent
spending decline, while spending on IT services and telecommunications will
drop 5.6 and 4.6 percent, respectively.
Other research firms also are expecting a decline in IT spending for the
year. In a report issued June 29, Forrester
said that the first two quarters of 2009 were worse than
expected, and that the decline will carry out for the rest of the year.
Forrester early in the year had projected a 3 percent decline in IT spending
worldwide, but revised that downward in June to 10.6 percent. The key culprit
was the credit crunch brought on by the troubles in the financial services
markets, according to Forrester.
However, Forrester analyst Andrew Bartels predicted that the steep decline
in 2009 will lead to a bottoming out of the IT market in the third quarter, and
will mean a stronger rebound sooner than had been expected.
Gartner also is predicting modest growth in the IT market in 2010. According
to its numbers, overall IT spending will grow 2.3 percent-to almost $3.3
trillion-though hardware sales will remain flat. The other segments will see
growth of between 2.3 and 3.2 percent, according to Gartner.