Gartner Says IT Spending Will Decline 4 Percent in 2009

The U.S. recession and the sluggish global economy mean that enterprises and smaller businesses are pulling back on their IT spending, especially hardware purchases, according to a new Gartner report.

Gartner’s latest look at IT spending, which the research firm released March 31, shows that worldwide IT spending will decline 3.8 percent from 2008 to 2009.

In 2008, global IT spending hit $3.4 trillion from sales of hardware, software, services and telecommunications equipment. This year, that number is expected to drop to $3.2 trillion, with sales of hardware – PCs and servers – taking the biggest hit.

As businesses are asking their IT shops to trim their budgets, Gartner predicts the nearly 4 percent drop in IT spending this year will be worse than the 2.1 percent declined recorded in 2001, when the Internet bubble burst.

While Gartner believes that the stimulus packages, especially the one announced by the White House earlier this year, will help, this money will not be able to overcome the “bleak near-term outlook.”

This means that businesses will not only make do with older equipment and software for longer than they normally would but it will also add to companies’ refresh cycles and push those schedules back even further.

The Gartner paper also shows that both consumers and businesses are looking for bargains and will do with less expensive equipment if it can save them money in the short term.

In the report, Gartner analysts break down IT spending into four categories: hardware, software, IT services and telecom. In 2009, hardware spending is expected to take the biggest hit, with spending falling nearly 15 percent for a total of $381 billion. IT services spending will fall 1.7 percent from about $809 billion in 2008 to $796 billion this year.

Spending on telecommunications equipment will fall 2.9 percent in 2009, totaling $1.9 trillion.

The one and only bright spot in the report is software spending, which will be flat in 2009. In 2008, businesses spent $222 billion on software, and companies are expected to spend the same amount this year.