Analyst: Downturn Officially Over
Businesses forecast to restart spending
After shrinking in 2009, the technology sector will see a recovery in 2010 as businesses and governments around the world begin spending on information technology again, according to a new report by Forrester Research. According to the market-research firm, the IT sector this year will make up most of its losses.
Global IT spending declined by 8.9 percent last year and is forecast to increase by 8.1 percent in 2010, increasing to more than $1.6 trillion. In the United States, spending shrank by 8.2 percent last year and is slated to grow by 6.6 percent this year to $568 billion.
Software and hardware big winners
Software and computer hardware will see the greatest growth, as Forrester forecasts a new six-to-seven-year cycle of technology investment growth and innovation defined by smart computing.
“The technology downturn of 2008 and 2009 is unofficially over,” said Andrew Bartels, Forrester Research vice president and principal analyst. “All the pieces are in place for a 2010 tech spending rebound. In the US, the tech recovery will be much stronger than the overall economic recovery, with technology spending growing at more than twice the rate of gross domestic product this year.”
Global purchases of computer equipment will be up 8.2 percent, communications equipment buying will rise by 7.6 percent, software spending will increase by 9.7 percent, purchases of IT consulting and systems integration services will grow by 6.8 percent, and IT outsourcing services will be 7.1 percent higher, according to the projections.
Big boost for Europe
Europe is forecast to be the strongest-performing region, particularly western and central Europe, where tech purchases will rise by 11.2 percent, boosted by the dollar’s decline against the euro. IT purchases in Canada will grow by 9.9 percent, in Asia Pacific by 7.8 percent, and in Latin America by 7.7 percent, according to the analyst firm.
The weakest market will be Eastern Europe, the Middle East, and Africa, rising by just 2.4 percent. When measured against local currency, however, the US will actually post the strongest growth of all the regional tech markets.
“New technologies of awareness married to advanced business intelligence analytics make computing smart,” stated Bartels, listing service-oriented architecture, server and storage virtualization, cloud computing, and unified communications as foundation technologies for the new era of technology development. CW (18 January, 2010)