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Worldwide spending on information technology will slowdown more severely in the global recession of 2009 than when the industry’s bubble burst in 2001. Technology analyst Gartner says IT spending will fall 3.8 per cent this year to $3.2trillion (£2.2trillion), compared with a fall of 2.1 per cent in the dot com crash. The “speed and severity” of this recession’s effect on consumers and companies will deplete IT budgets, in nearly all areas, more deeply than in the last downturn. Budgets for telecommunications, hardware and IT services will be cut, the firm forecasted, as IT buyers, particularly hardware users, ‘make do and mend’ to avoid new purchases. It said software will be the only sector to grow this year, albeit by a marginal 0.3 per cent, partly as applications are essential to run businesses and support their existing operations. But in all IT sectors, buyers will opt for low-cost alternatives and, if it’s cheaper, will extend the lifetime of deals, devices and services rather than investing in new ones. Gartner said the pain from sliding sales will hurt vendors in emerging markets the most, while mature markets like the UK will reel more from fewer replacement orders. IT vendors were advised to plan for a curtailing in sales as both businesses and consumers will pare back for the rest of 2009, with a “slow, prolonged” recovery in 2010. And although government stimulus packages were hailed as important in the long term, “they will not be able to offset this bleak near-term outlook,” the analyst said, downgrading its forecast for the third time since October. “Until global financial markets stabilise, global GDP growth, including IT spending, is unlikely to strengthen,” it added, warning of less new market penetration as a result. Research VP Richard Gordon reflected: “IT organisations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending.” Tech researcher Forrester also downgraded its forecast for public and private sector purchases of IT goods and services, saying they will fall by 3.1 per cent, not 1.6 per cent as it initially thought. “In many ways, the biggest factor affecting the tech market is not the recession but the breakdown of the financial system,” Andrew Bartels, Forrester’s research VP said on Tuesday. “The credit crunch is still causing companies to dramatically cut back on all forms of capital investment, including many IT goods and services, and this will affect 2009 revenues for most IT vendors.” Forrester said it expected that all sectors of the IT economy, apart from outsourcing, would decline this year, but predicted growth would return in the fourth quarter and strengthen in 2010. Apr 2, 2009 Email this article Printer friendly page Previous Page
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