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Worldwide IT spending to fall

Forrester also predicts rise in 2010

Worldwide spending on IT is expected to drop to $1.66 trillion (£1.1 trillion) in 2009, says Forrester Research.

According to a study by the analysis company, the drop is three percent less than IT spending in 2008 but will be counteracted by an eight percent rise in 2010.

The market saw an eight percent growth during 2008, Forrester said. The economic recession is the main reason for the 2009 decline, followed by the stronger dollar, according to the report.

If measured in euros, global IT spending in 2009 "will be positive at six percent, but then slide to three percent in 2010 as the euro starts to revive against the dollar," the report states.

Forrester noted that "an ideal measure of global IT market growth would use a basket of local currencies, weighted for each geography's share of the global IT market". Under this system, IT spending will grow by three percent this year and six percent in 2010.

The forecast could be worse, according to Forrester Research analyst Andrew Bartels. "In this environment bad news can actually be good news if it's not disastrously bad news," he said.

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Some technology areas will do better than others. Software spending this year will remain flat over 2008, at $388bn (£266bn), while communications equipment, IT services and computer hardware expenditures will all see a drop, Forrester said.

Server virtualisation technology is reducing the need for physical servers, Bartels said. Companies may also be holding off on refreshing their PC and laptop supplies, or even relying more heavily on smartphones, he added: "CIOs might be saying 'Our sales guys can do everything they need with a BlackBerry'".

Meanwhile, industry-specific computing devices, such as next-generation RFID (radio frequency identification) systems, are seeing growth, Bartels said.

Forrester cautioned that its findings are based on the assumptions that the recession will ease starting in the second half of this year, and that the dollar's strength will drop somewhat.

Bartels cited factors such as lower energy prices, an "unfreezing" of the commercial credit market and the prospect of a large stimulus package from the incoming Obama administration as reasons to believe the economy could turn around sooner than later. It may take longer for emerging markets to recover, he added.

See also: IT industry to avoid second dotcom bust


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