Research company IDC cuts its IT spending forecast for 2009 as the financial crisis continues to grow and consumers spend less on technology and other goods and services. In the United States, IDC predicts that IT spending will increase less than 1 percent in 2009, while the rest of the world watches IT spending grow less than 3 percent. Hewlett-Packard and Dell will deliver new financial results later in November, which should give a more in-depth picture of the impact of the financial crisis on tech companies.
As the financial
crisis grows and consumers spend less as the holiday shopping season
IDC has slashed its IT
spending forecast for 2009, with the United
States, Western Europe
taking the biggest hit.
In a report released Nov. 12, IDC
predicts that worldwide spending on IT hardware, software and services will grow
only 2.6 percent year-over-year in 2009. The research company originally
predicted IT spending would grow 5.9 percent in the same period.
The IDC report also predicted that IT
spending in the United States,
Western Europe and Japan
will grow less than 1 percent in 2009 as these three major economic regions
sort out the implications of the financial crisis on Wall Street and in other
stock markets. In the United States,
IDC predicted that IT spending will only
grow 0.9 percent, which is much lower than the 4.2 percent growth IDC
called for in August.
While these numbers seem fairly glum, IDC
said it believes the IT industry is more resistant to market changes than it was
just a few years ago. The fact that there is some growth in the forecast shows
how important IT has become to nearly every business.
"Technology is already deeply embedded in many mission-critical
operations and remains critical to achieving further efficiency and
productivity gains," John Gantz, an IDC
analyst, wrote in the report. "As a result, IDC
expects worldwide IT spending will continue to grow in 2009, albeit at a slower
Still, IDC is predicting that IT spending
will not return to a 6 percent growth period until 2012, and in the next three
years, more than $300 billion in IT industry revenues will be lost.
IDC is not alone in reducing its IT
spending numbers. In September, Gartner
and Forrester Research produced new reports that showed IT spending slumping
as the financial crisis continues. Both Gartner and Forrester reduced their IT
growth forecasts to about 2 percent in 2009.
The IT industry should have a clearer indication of the impact of the
financial crisis when two bellwethers report financial earnings later in
is slated to release new quarterly numbers Nov. 20 and Hewlett-Packard
reports its numbers Nov. 24.
Dell has already signaled that the worldwide economy
has begun to make the company look at additional costs savings. On Nov. 3, CEO
Michael Dell wrote an internal company blog post
that asked employees to
take an unpaid vacation. In addition, he wrote that he would seek additional
cost savings by reducing the number of outside companies Dell uses for