System iNetwork

January 14, 2009

Forrester Predicts Small Rise Or a 3 Percent Drop in IT Spending

A new forecast from Forrester Research is predicting that global purchases of IT goods and services will decline by 3 percent in 2009, as measured in U.S. dollars. Compared to 2008, Forrester saw global IT purchases increase by 8 percent, and the 2009 decline ends seven years of growth in global IT purchases. Technology purchases fell by 6 percent in both 2001 and 2002.

"Our forecast for 2009 rests on the assumptions that the economic recession in the U.S. and other major economies will start to end in the second half of 2009," notes Andrew Bartels, Forrester Research vice president and principal analyst. "For IT vendor strategists, the global IT market will be a gloomy one in 2009, with prospects of improvement in 2010. Unlike in past years, there are no significant growth markets to offset the weak ones."

The Upside

Ironically, when measured using a mix of local currencies, the picture is a bit better, Forrester reports, with global growth of 2.5 percent projected for 2009. Regionally in the relevant local currencies, U.S. purchases of IT goods and services will grow by 1.6 percent in 2009; purchases in Western and Central Europe will be 1.3 percent higher than in 2008; Eastern Europe, the Middle East, and Africa will see 5 percent growth; and Asia Pacific purchases will rise by 3 percent. However, when all the regional numbers are equated to U.S. dollars, there is a sharper slowdown in IT spending globally.

The report highlights currency fluctuations as another key factor driving the global IT market and having a negative effect on U.S. vendors in particular. Bartels notes, "The fact that 2009 IT purchases growth is so much weaker in U.S. dollars than in local currencies means U.S. vendors with significant overseas business will feel a double dose of pain, as both the economic environment and currency market will work against them for much of 2009."

By sector, Forrester expects software investment to remain the same although communications equipment investment will shrink by 3 percent. Purchases of personal computers, servers, storage devices, and peripherals are expected to slip by 4 percent to $434 billion in 2009, from $450 billion in 2008.

Forrester also believes that governments and businesses will buy $484 billion of IT consulting, systems integration, and outsourcing services in 2009, which is 3 percent less than in 2008. IT outsourcing services will do a bit better than IT consulting and systems integration services, though.

The report is "Global IT Market Outlook: 2009".

IBM i

I've been talking to a variety of people in our industry for a report that'll come out in the March issue of System iNEWS about IBM i-focused spending. The one-sentence summary: IBM i-related spending continues on a similar track with loyal customers, but new purchases and upgrades are being tied much more closely to ROI than ever before.

Posted by cmaxcer at January 14, 2009 9:53 AM