13 Jan 2009
The global economic crisis will reduce spending on IT products and services by three per cent in 2009, according to Forrester Research.
Recessions in the US and EU countries will be the main driver for slower spending, followed by currency fluctuations.
Further reading
Technology spending last fell year-on-year in 2001 and 2002, after the dot com crash.
Forrester said that it expects a boost for some European companies from the weaker euro in early 2009, including vendors such as Alcatel-Lucent, Ericsson, SAP, Nokia and Siemens, but this is likely to be short-lived once the US dollar returns to a lower value against the euro.
While the market will be challenging for all technology spending in 2009, Forrester sees some sectors as more resilient than others.
"Software purchases will do a bit better than other categories, but all vendors will face a tough time until late 2009 or early 2010," said Forrester vice president Andrew Bartels.
2009 software purchases will be unchanged from 2008 at $388bn (£265bn), while the hardware market will fall four per cent to $434bn (£297bn) for products including personal computers, servers, peripherals and storage gear.
The communications equipment market, including routers, switches and teleconferencing systems, will fall three per cent to $353bn (£241bn) in 2009, said Forrester.
The IT services and outsourcing market will fall three per cent to $484bn (£331bn).
Forrester said that IT spending may recover to grow nine per cent in 2010 in dollar terms and six per cent in local currencies.
Today seems to be full of the subject of IT budgets set to be reduced for 2009 and into 2010. I'll bet that whilst business leaders are reducing budgets, they will also want their IT departments to deliver more through 2009 and strive further to help ease these company-wide budget cuts by providing more automation through software and enhanced functionality that better supports the ever changing business processes.
My question is this: When are businesses going to wake up and begin to invest in more cost effective technologies that enable in-house systems to be built that support the business rather than changing the business to suit - within budget - COTS software solutions AND within these decreasing budgets. Furthermore, when is the media going to begin exploring some of these more economical alternatives to better inform their readers?
For over 30 years, companies like Revelation have used true MultiValue technologies to help their customers deliver such systems. Through OpenInsight we are able to deliver million pound systems to organisations for a tenth of the cost and our VARs (Value Added Resellers) usually only need to hire a fraction of the developers that many other technologies need, although I prefer to evangelise the notion of hiring the same number of people to do more for clients, push the boundaries of the solutions more and maintain a competitive edge.
In my honest opinion, I believe that maintaining a competitive edge will see many companies in hotly contested markets win through the global recession.
Posted by: Martyn Phillips 13 Jan 2009
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