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  • Global IT Spending Barely Ahead of 2008; Some Regions Showing Strength

    March 9, 2009 Dan Burger

    The supply of data keeps piling up. The demand for getting a better handle on that data keeps growing. But the money to convert those mountains of information into a better business strategy is being pulled back. Some organizations may be spending now to be in better shape when the economy starts to warm, but apparently many are keeping their hands in their pockets, particularly in the United States and Western Europe, spending only what they absolutely have to.

    IDC, in its most recent forecast, trimmed its worldwide IT spending estimate for 2009 to just 0.5 percent growth compared to 2008. This amends an IDC forecast made in November 2008 that predicted a 2.6 percent growth in 2009, which itself was tweaked down from a pretty rosy forecast back in August. Throughout 2008, IDC reports were continually backsliding on earlier estimates made for that year as well. That’s the way it goes sometimes. You can’t always judge the size of a pig from a distance. Now that we’re up close, things look different.

    And if you equate growth with the rear end of a pig, you can’t slice ham much thinner than this.

    However, just to show the difference between thin and thinner growth, IDC projects year-over-year IT spending in the United States to hit 0.1 percent. It takes a sharp blade to whittle that number from the slender 0.9 percent growth prediction that was made a little more than three months ago. But, hey, we can still call it growth, right?

    Also cutting it thin is Western Europe, where the latest IT spending revision now shows a 0.1 percent sliver of growth on their plates. This was shaved from the November forecast of 1.2 percent growth. IDC is expecting IT spending in Germany and the United Kingdom to hover around the 2008 spending number, but forecasts France and Italy will experience “negative growth.” Negative growth? Yes, that’s the flip side of “positive decline,” although you don’t hear that term very often.

    For those who think globally before acting locally, the forecast for certain geographies may be cause for concern, if you believe in outspending your competitors in information technology to be an advantage. Yes, everybody’s spending is getting a trim, but not everybody is getting a buzz cut.

    The best action can be found in the Middle East and Africa, where growth is being pegged at 8 percent, even though that off slightly from m the November forecast of 8.5 percent. Central and Eastern Europe will be the hardest hit. IT spending there will decline 7.5 percent in 2009, IDC expects.

    Although Latin America, like everyone else, has taken a dip, compared to the U.S. and Western Europe it looks pretty good with overall IT spending still on pace to top last year by 4 percent. Brazil will be leading the way with a 6 percent increase.

    The growth in the Asia/Pacific region (excluding Japan) is getting skinny overall, but a few big players have IT spending growth increases that may worry some of their global competitors. While the IDC folks are expecting only 1.4 percent growth in the region, instead of the 4 percent that was forecast back in November, IT spending in China is expected to grow 6.5 percent (down from 9.1 percent) and India’s growth expectations are on track to hit 5.7 percent (down from 10 percent). In IDC-speak, Japan will gain some negative growth to the tune of 1.8 percent in 2009, which is down from the previous forecast of 1 percent actual growth.

    IDC notes that hardware spending will take the biggest fall with a steep decline in outlays for servers, PCs, and printers (including multifunction printers, or MFPs). Based on IDC’s surveys and models, hardware will come up 3.6 percent short of 2008’s spending figures. Software and services (each a separate category) are still expected to beat the 2008 numbers by 3.4 percent. That’s down from previous projections, but still not in the paper thin range.

    Worldwide IT spending in 2009 is still expected to come in at $1.44 trillion. Back in January 2007, the IDC forecast for worldwide IT spending in 2010 would be nearly $1.5 trillion. That’s certainly a possibility given forecasts that the economy could improve by late 2009 or early 2010.

    “The revised forecast is very close to the downside scenario we developed in November, which was based on the lowest worldwide GDP growth since World War II,” noted Stephen Minton, vice president of worldwide markets and strategies at IDC. “While the outlook for 2009 is now worse than we thought just three months ago, we still expect IT spending to recover somewhat in 2010 and gain momentum through the rest of the forecast period.”

    The IDC forecast extends to 2012. The full report, Economic Crisis Response: Worldwide IT Spending 2008-2012 Forecast Update, February 2009 Revision (IDC #216909), with the latest revisions is available for purchase from IDC. The price is $2,000.

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    Tags: Tags: mtfh_rc, Volume 18, Number 10 -- March 9, 2009

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    1. https://theconversation.com/cyberattacks-are-on-the-rise-amid-work-from-home-how-to-protect-your-business-151268

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TFH Volume: 18 Issue: 10

This Issue Sponsored By

    Table of Contents

    • Getting Dizzy from Dynamic Infrastructure
    • The Economy Gives the Server Biz a Flat Tire in Q4
    • Infor Battles Customers in Court Over License Fees
    • As I See It: Isolation
    • Global IT Spending Barely Ahead of 2008; Some Regions Showing Strength
    • Have IT Vendors Been Hit Harder Than IT Departments?
    • CFMUG Downshifts from Monthly to Two Yearly Meetings
    • IBM to Bid for Satyam? Rumors All Over the Place
    • MKS Weathers the Economic Storm in Fiscal Q3
    • Overworked, Underpaid, and No Free Donuts and Coffee

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