IT spending down for the first time since 2001

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IT spending down for the first time since 2001

Analyst firm Gartner has painted a bleak picture of the IT industry in the months and years to come.

Richard Gordon, managing research vice president and chief forecaster at Gartner, explained during a teleconference today entitled IT Spending Forecast, 1Q09 Update: 2009 Growth Will be Worse Than 2001 that the economic pressures affecting businesses and consumers will have a negative affect on IT spending.

"The IT market slowdown in 2009 will be worse than that of 2001 when the dot-com bubble burst," he said.

Nearly all sectors of the IT market will suffer, according to Gordon, with the exception of software. Gartner has revised its forecasts for all industries, however, shaving as many as 15 percentage points off some sectors.

Services will fare better than some areas, and will continue to benefit from the business-critical elements of their offerings, such as security, call centres and helpdesks, as well as the fact that many firms will look to extend the lifecycle of existing infrastructure.

Enterprise hardware will suffer the most, the analyst firm said, dropping by 15 per cent. Gordon explained that an easy way for firms to save money would be not to refresh their PC and desktop hardware, adding that "PC shipments will fall accordingly".

Gartner warned that only enterprise software revenues will rise, predicting a total of US$222.6bn in 2009, reflecting a 0.3 per cent growth rate from 2008 revenue of $221.9bn.

Although Gartner described this growth as flat, the firm added that it was " mildly positive" and an indication that enterprise software firms could perform better in the recession than other industries.

"Current expectations are for a slow economic recovery, mirrored by a software spending upturn starting no earlier than the first half of 2010," said Tom Eid, research vice president at Gartner.

Software that tackles cost reduction is likely to sell well, according to Gartner. "Organisations are looking for products to help them optimise their infrastructure, such as virtualisation solutions," said Gordon.

Fabrizio Biscotti, research director at Gartner, added: "Vendors offering software-as-a-service, IT asset management and an ability to leverage open-source software will benefit."

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