Gartner sees global slowdown in IT spending

IT spending will decline in all sectors in 2009 says analyst company, although Middle East Africa region predicted for slight increase

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By  Mark Sutton Published  April 1, 2009

Worldwide IT spending will slow by 3.8% in 2009, according to Gartner, although the Middle East Africa region will show a small increase.

The analyst company forecasts that IT spending for this year will hit $3.2 trillion, down from $3.4 trillion in 2008. In the MEA region, spending will rise to $213.5 billion from $207.8 billion, an increase of 2.7%.

Gartner sees a slowdown in spending on all sectors of technology, with no recovery until global financial markets stabilize.

Richard Gordon, research vice president, and head of global forecasting at Gartner said: “IT organisations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending. The speed and severity of the response by businesses and consumers alike to these economic circumstances will result in an IT market slowdown in 2009 that will be worse than the 2.1% decline in IT spending in 2001 when the internet investment bubble burst.”

Hardware spending will be the worst effected, down by 14.9% to $324.3 billion; telecoms will decline by 2.9% to $1.89 trillion, and IT services will decline by 1.7% to $796.1 billion. Software spending is expected to show negligible growth, up 0.3% to $222.6 billion, although that is against growth in 2008 of 10.3%.

Gartner predicts that the slowdown will reduce new market penetration, with reduced sales impacting vendors in emerging market the most, while developed markets will show a greater slow down in replacement activity. Buyers will also switch to lower cost products or try to extend the life of existing solutions.

“IT vendors should plan for business and consumer spending to be curtailed during 2009 and for a slow, prolonged recovery during 2010. At the same time, they should be alert to opportunities to help buyers with cutting costs, complying with new government regulations and taking best advantage of government rescue plans,” Gordon said.

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