John Paczkowski

Recent Posts by John Paczkowski

Forrester: Looks Like We Got Our 2009 Tech Spending Growth Numbers Reversed…

Enterprise technology spending grew seven percent in 2007, according to a new report from Forrester Research (FORR). Spending grew 4.1 percent in 2008. And it was expected to grow 6.1 percent in 2009. But with information technology departments steeling themselves against the economic downturn, that’s no longer the case.

In 2009, enterprise tech spending will grow not 6.1 percent, but 1.6 percent, hamstrung by a cautious reprioritizing of buying habits. Now that’s far better then the 15 to 20 percent decline in tech spending that occurred in the 2001/2002 downturn, but it’s ugly nonetheless. A few bullets from the Forrester report:

  • Computer equipment purchases will fall 3.1 percent in 2009, on top of a decline of 0.4 percent in 2008.
  • Communications equipment growth will slow to 0.8 percent in 2009.
  • Software purchases, which grew 5.8 percent in 2008, will slow to 3.4 percent in 2009.
  • IT consulting and systems integration services will weaken. Growth will be 4.1 percent for 2008 and just 2.2 percent for 2009.

Disconcerting metrics, to be sure. As Forrester aptly notes, “The question for the U.S. tech market is no longer whether the U.S. economy is in recession–instead, it is how long and deep the recession will be and how much damage will it do to the tech sector.” The research outfit optimistically suggests that the recession will last into mid-2009. Hopefully, that prediction will prove true. Because if it doesn’t, the alternative view is frightening indeed. Says Forrester, “The most likely alternative to our assumption of a four-quarter U.S. recession is a deeper and longer recession that lasts five to seven quarters. The causes of a nasty and persistent recession of this kind would be the downward spiral of consumer and business confidence, which feeds further declines in the housing market and business investment, which cripples the financial sector and leads to more cutbacks in consumer and business confidence.”