The tech slowdown will continue up to the third quarter of 2009, according to global research firm Forrester. IT consulting and systems integration services will hit the wall in 2009, while IT outsourcing growth will remain moderate in 2009 and 2010, getting a small respite from the economic slowdown, it said in its report released on Thursday.
Because of the slowdown, companies will turn to vendors that can help cut costs, but growth in IT outsourcing revenues will remain moderate due to the use of lower-cost offshore resources and smaller-scale outsourcing deals, among other reasons, according to the report.
On a positive note, the Research firm said that while the US IT market outlook is bad, it is better than the 2001-02 technology downturn. “This time, computer equipment vendors will see declines of 5-10% in US revenues on a quarterly basis, not the 20% to 25% drops of the early 2000s,” said Andrew Bartels, the report’s author and vice-president, Forrester Research.
Forrester has projected a growth of 1.6% growth in IT spends for 2009, assuming a decline in US GDP in the third quarter of 2008. The decline will accelerate in the fourth quarter of 2008 and the first half of 2009 before a weak recovery starts in the second half, the report titled ‘US IT Market Outlook: Q4 2008’ said.
The report is based on an analysis of US Department of Commerce data and the financial reports of 49 IT vendors.
The industries that present the best opportunities for IT vendors in 2009 will be the federal government, primary production, consumer products and pharmaceuticals, chemicals and oil and gas, public services like healthcare and education, insurance, utilities, telecom, and most professional services which will not be impacted much by the recession.
On the other hand, those most likely cut back their IT purchases are IT goods and services including financial services, consumer durables, construction and housing, retail, and industrial products (including autos).
The financial services industry is expected to cut IT purchases by 3% in 2008 and by 4% in 2009. While the construction industry is expected to cut purchases back by 2% in 2008 and 2009. The retail industry will have no growth in IT purchases in 2009, and IT buying by industrial manufacturing will slow to 1% in 2009, it noted.
Those with mixed IT buying prospects include high-tech products, wholesale trade, media and entertainment, transportation and logistics. Some professional services like consulting and advertising services will see slowing of growth in either 2008 or 2009, it pointed out.
Source: Economic Times
Informative .... well constructed too
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