Doom forecast for IT in 2009

October 17, 2008

Is it the doom time for US and Europe ? I surely feel so. 


Today the Gartner Inc, which is the world’s biggest technology research company, has made a new forecast about the global technology spending. And as per the forecast things are set to turn from bad to whose for the developed western world.


As per the new forecast information technology spending could rise only 2.3 per cent in 2009, hitting $3.5 trillion with businesses cutting back budgets as the economic crisis spreads.


“Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune,” said Peter Sondergaard, Gartner’s senior vice president and head of research.


Gartner had previously forecast that corporate spending on hardware, software, telecommunications goods and technology services would grow 5.8 per cent next year. Sondergaard described the new forecast as a “worst-case scenario,” but said in an interview that the outlook could get even worse if the economy continues to weaken.


If the economy goes into a prolonged recession next year with GDP declining, then overall IT spending could fall next year compared to 2008,


The firm expects software sector revenue to climb 8.6 per cent, a slowdown from a 13.5 per cent revenue increase in 2008. Investors closely watch Gartner’s forecasts, as they do surveys from Wall Street brokerages such as Goldman Sachs, for evidence of changes in corporate spending plans.


Gartner now expects 2009 IT spending to decline 0.8 per cent in Western Europe. The firm had previously forecast spending to grow 2.8 per cent in the region. It expects spending would rise 0.5 per cent in North America, a sharp decline from its previous forecast of 5.3 per cent growth.