Global IT spend may grow 9.3 pc: Forrester

MUMBAI: If the last forecast for IT spending in 2010 looked good, this looks even better. Technology research firm Forrester has raised the growth forecast for the global IT market, pegging it at an extremely healthy 9.3%, nearly four percentage points higher than the last technology forecast put out by another analyst firm Gartner. The recovery will be led by spending on computer equipment and software and will last well beyond 2010, according Andrew Bartels, vice-president and principal analyst, Forrester Research.

As compared to 2009, when US spending on computer equipment slumped 12%, 2010 is expected to see a bounce back with 11% growth. Spending on software will follow a similar curve, bouncing back with a 10.5% growth compared to the 9% fall in 2009. “The 2009 tech downturn was shallower and shorter than the 2001-02 US tech depression,” Mr Bartels said in his research note.

Forrester’s research is based on economic data such as GDP growth and business profits, technology cycles of innovation, growth and digestion, and exchange rates. “Our forecasts are not driven by surveys because as a methodology we’ve found time and again it is backward looking,” Mr Bartels said. US IT outsourcing services consisting of applications, mainframe, network, desktop and other outsourcing is estimated to grow to $ 91 billion in 2010 and by a further 6.4% to $97 billion in 2011.



However, Mr Bartels was relatively less optimistic about IT outsourcing growth, which he said was slowing down compared to growth in the rest of the segments, although it is still forecast to show good growth. Disenchantment with large project outsourcing is one of the reasons for the relatively slower growth, according to Mr Bartels. The entry of Indian IT services players at a lower cost has also contributed to the decline in revenue terms, he added. Total US IT spends on outsourcing, services, software, communications equipment, and computers and peripherals is projected to grow by 8.4% to nearly $ 600 million by 2011. The biggest IT spenders will be professional services firms, followed by financial services firms and the government sector.

Cloud computing, the biggest buzzword last year, is important but not that important, Mr Bartels said. Much of the growth in the US IT market will come from a new generation of smart computing technologies, which Forrester defines as software that will help companies get better results from their assets and liabilities as opposed to prior tech cycles which solved pressing business problems.