Gartner Forecasts IT Spend to Decline by 4%

by CXOtoday Staff    Apr 01, 2009

Information technology (IT) spending is expected to fall nearly 4 percent this year, the biggest slowdown since the dotcom bust of 2001, market research firm Gartner said.

Worldwide IT spending would decline 3.8 percent in 2009 to $ 3.2 trillion from last year’s 3.4 trillion dollars, Gartner said in its latest report Gartner Dataquest Market Databook, March 2009 Update.

"IT organizations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending," said Richard Gordon, research vice president and head of global forecasting at Gartner.

"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 percent decline in IT spending in 2001 when the Internet investment bubble burst," he said in a statement.

Gartner lowered its forecasts for all four key market sectors — hardware, software, IT services and telecommunications.

It forecast spending on computing hardware in 2009 of 324.3 billion dollars, a decline of 14.9 percent from the 381 billion dollars spent last year, when the sector recorded growth of 2.8 percent over the previous year.

Software spending was predicted to rise by a marginal 0.3 percent this year to 222.6 billion dollars from the 221.9 billion dollars spent last year.

IT services spending was forecast to fall 1.7 percent to 796.1 billion dollars from the 809.5 billion dollars of 2008.

Telecommunications spending was expected to fall 2.9 percent to 1.89 trillion dollars from the 1.95 trillion dollars spent in 2008.

Gartner said government stimulus package spending will not be able to offset this bleak near-term outlook. "Until global financial markets stabilize, global GDP growth, including IT spending, is unlikely to strengthen," it said.

"IT vendors should plan for business and consumer spending to be curtailed during 2009 and for a slow, prolonged recovery during 2010," Gordon said.


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