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Global IT market to grow by 8.1% in 2010

Recession's effect on tech over, says research company

The recession's effect on the IT market could be over, after Forrester revealed it expects the global IT market to grow by 8.1 percent in 2010.

The research firm based its projections on data reported for 2009, though its fourth quarter numbers are incomplete.

Forrester says hints of a recovery surfaced in the third quarter.

"The tech downturn of 2008 and 2009 is unofficially over," Forrester said in its 'US and Global IT Market Outlook: Q4 2009' report.

"While the Q3 2009 data for the US and the global market showed continued declines in tech purchases (as we expected). We predict that the Q4 2009 data will show a small increase in buying activity, or at worst, just a small decline."

Forrester points to reports from Oracle and Accenture as evidence of the recovery.

Oracle posted a 4 percent increase in global revenues, while Accenture experienced an 11 percent decrease in Q4 global revenues but remained "cautiously optimistic for 2010".

"The financial crisis and the related focus by businesses conserving cash caused big cuts in capital investments of all kinds, including computer and communications equipment and licensed software. IT services held up better for a while, but the drop in licenced software purchases led to a similar drop in systems integration project work to implement that software," Forrester said.

"Only IT outsourcing was able to eke out a small increase of 2.1 percent"

Forrester estimates that US software spending could grow by 9.2 percent in 2010, reversing the 7.4 percent decline in 2009 and potentially putting software purchases above 2008 levels.

Computer equipment spending is also expected to see a 9.2 percent increase in the coming year, but the level of purchases will remain lower than in 2008 and 2007, Forrester says.

And communications equipment will experience a "more modest" recovery with an expected spending increase of about 2.8 percent, leaving purchasing in that area below 2008 and 2007 levels.

IT consulting services will experience 5 percent growth and IT outsourcing a little less than 4 percent in 2010, according to Forrester.

Despite the optimistic outlook on IT spending and an economic recovery, Forrester doesn't discount the potential for further financial disaster in 2010.

The research firm points to continued unemployment and cutbacks in government stimulus programs that could cause business investments and consumer spending to drop.

"The most likely alternative to our forecast that the US and global IT markets will recover in 2010 is a faltering tech market due to a double-dip recession that returns in 2010 after a brief two- to three-quarter economic recovery," the report reads.

"Should this happen, US tech purchases would decline by 3 to 4 percent in 2010, with a second-half decline offsetting a first-half tech revival."

See also: Netbook shipments up 103% on last year


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