IT growth slowing but still healthy

WHILE GARTNER PREDICTS THAT WORLDWIDE IT SPENDING GROWTH WILL SLOW DOWN TO 6 PER CENT IN 2009, this will represent fairly robust growth in a generally poor economic environment, the research firm says.

Worldwide IT spending will total US$3.6 trillion in 2009, an increase of 6 per cent over its projected total of $3.4 trillion in 2008, Gartner projects. Total worldwide IT spending is expected grow by 8 per cent this year and rose 10 per cent in 2007 from the year before, the firm reports.

Spending on software (8 per cent projected growth in 2009) and IT services (7 per cent projected growth in 2009) will be the fastest growing services, while computing hardware spending is projected to slow to just 4 per cent growth next year, down from 10 per cent spending growth on hardware worldwide in 2007. Telecom spending, which accounts for more than half of all IT spending worldwide, will grow by a projected 6 per cent and will total nearly $2.1 trillion.

Jim Tully, a vice president and analyst at Gartner, says that while IT spending growth is projected to be slower in 2009 than in 2007 and 2008, IT spending will still be increasing much more rapidly than many sectors of the economy, which he says will continue to be affected negatively by the United States’ recent economic downturn.

“In subsequent years we will see reduced growth, but the fundamentals remain strong,” he says. “Emerging regions, replacement of obsolete systems and some technology shifts are driving growth.”

Gartner expects that spending on telecom services will grow slowly and will account for only 44 per cent of the market in five years’ time. Because continued use of older telecom systems will slow down telecom spending growth, Gartner says they will be a drag on overall IT spending as well.