Global spending on IT to slow significantly in 2009 due to crisis

Worldwide spending on information technology (IT) is expected to slow significantly in 2009 as a direct result of the global financial crisis that began last September.

According to a newly revised forecast from research company International Data Corp. (IDC), worldwide IT spending will grow 2.6 percent in 2009, down from IDC’s pre-crisis forecast of a 5.9 percent growth. In the US, IT spending growth is expected to be 0.9 percent in 2009, much lower than the 4.2 percent growth forecast in August.

The expected lower spending for IT especially in the US had many companies in the Philippines, especially those in business process outsourcing (BPO) worried. Some Filipino BPO executives are hoping though that in finding ways and means to cut on costs, foreign companies will find outsourcing to the Philippines as a good cost-cutting measure.

“Although all the economic forecasts went from up slightly to down drastically in a matter of days, the good news is that IT is in a better position than ever to resist the downward pull of a slowing economy,” IDC chief research officer John Gantz said.

He added that technology is already deeply embedded in many mission-critical operations and remains critical to achieving further efficiency and productivity gains. As a result, IDC expects worldwide IT spending will continue to grow in 2009, albeit at a slower pace.

On a regional basis, spending growth in Japan, Western Europe, and the US will hover around one percent in 2009. In contrast, the emerging economies of Central and Eastern Europe, the Middle East and Africa, and Latin America will continue to experience healthy growth, but at levels notably lower than the double-digit gains previously forecast. On a sector basis, software and services will enjoy solid growth while hardware spending, with the exception of storage, is expected to decline in 2009.

Looking beyond 2009, IDC expects IT spending to make a full recovery by the end of the forecast period with growth rates approaching six percent in 2012. Despite these gains, IDC estimates that more than $300 billion in industry revenues will have been lost due to slower spending over the next four years.