Don’t you think any moron can conclude that IT spending in 2009 will reduce due to the current economic recession ? The answer is yes, he can conclude; but over here we will look into the details of how and why will IT Spending in 2009 go down.
There have been research reports all over the web indicating that the biggest cause of this slowdown would be the catastrophe caused due to the breakdown of the financial system. Severe shortage in liquidity is the main reason why companies are cutting costs in investing into products and services on the internet. Gartner came out with a report suggesting some key insights -
1. Global IT spending will decline by 3.8 percent in the current fiscal year. Worldwide IT spending to total $3.2 trillion in 2009, as compared to 2008′s revenue of nearly $3.4 trillion.
2. The software market being more mature will fare better as compared to the times in 2001.
3. Lower budgets, slack in hardware implementations and hardware maintenance spending would largely be reserved.
This year would also be the perfect time for S-a-a-S and Open Source users to position their strategies so as to get a number of opportunities and grow in leaps and bounds. It is also good news for IT outsourcing as it is expected to out perform other sectors and grow at a moderate rate this year. Forrester reports, “While consultancy and systems integration will slip, IT outsourcing growth will be small, but positive at 2.1 percent. It could improve to 6.8% on 2010.” The genuine assumption here is that the cost cutting opportunities would make the Indian companies command a competitive advantage.
NDTV Profit’s report further said that India’s IT spending is expected to slacken this year, growing at an annual 14.1 per cent, down from 18.1 per cent recorded in 2008. Springboard Research’s report titled ‘India IT Market Predictions 2009′ said, IT spending in retail and real estate will be the hardest hit, but the advent of 3G and a protected financial system will help sustain growth in the telecom and banking sectors respectively. Dell’s restrucuring of its business operations into four segments viz. consumer, large enterprise, public sector and small and medium businesses is an indicator of a change in strategy after the analysis of current trends.
Times are such when all IT companies across borders are cutting down their costs and reducing budgets while consumers are keeping a check on their discretionary spending. The stimulus packages that governments have offered will have a positive impact in the long run, but situations presently will not turn hunky dory instantly. New Market penetration and replacement activities will suffer in different markets and have a different impact on businesses worldwide. A ray of hope lies when 2010 comes and the spendings will be expected to grow.
So, let us live through 2009 by making the best use of what we have.
