Gartner: 2009 IT Spending Revised Downward
Well as the first quarter ends, the staff at CIO Update report on the latest analysis from Gartner regarding the direction of global IT Spending in their article Gartner Calls for Grim Spending Contraction. I guess you can tell from the title which direction IT Spending will go. It appears that the projection for 2009 based on the 1st quarter results is a decline of 3.7% in IT Spending this year.
The current global economic recession is affecting not only software sales but also hardware sales, IT Services, and telecommunications and this deterioration in sales will surpass the 2001 IT Industry downturn. The contraction in IT Spending is global; however the US and Western Europe will be hardest hit. Global Gross Domestic Product (“GDP”) is forecast to contract by 1.2% which is the largest hit to the global economy since 1982. Government stimulus packages will not have any short-term affect and IT Spending is not expected to improve until global financial markets stabilize.
The report summarizes the expected end results due to this downturn as follows:
- "The slowdown in IT spending will reduce new market penetration and will slow replacement activity.
- The impact of reduced new penetration will be more strongly felt in emerging markets, while the impact of reduced replacement activity will be more strongly felt in mature markets.
- Consumers and businesses will continue switching to lower-cost products, extending the life of existing devices and extending their current contracts and purchasing agreements."
