We’ve hit bottom. Finally.

In its latest “US and Global IT Market Outlook” report, Forrester (FORR) says information technology spending in 2009 will fall 10.6 percent in 2009. And while that’s far worse than the three percent decline the research outfit forecast at the beginning of the year, it’s also the nadir of this particular crisis, and we are at the beginning of a rebound that will gain momentum in 2010.

According to Forrester, anyway.

“While Q1 2009 saw a scary drop in purchases in the U.S. tech market, ironically that is good news for the long run and we expect to see a stronger rebound sooner,” Forrester analyst Andrew Bartels said in a statement. “The big drops are not precursors to further declines; rather, we think they are evidence of a temporary pause in U.S. tech purchases, which we expect to start recovering in Q4 as businesses realize that they overreacted in the first quarter.”

So after a year of gloom and doom, things are beginning to look up.

And after the deal, then what? Massive layoffs, most likely. Analysts say redundancies between the two companies’ businesses could cause IBM to sack as much as a third of Sun’s employees in one of those “resource actions” it’s so fond of. “This deal is definitely going to lead to a lot of combined layoffs,” Forrester Research analyst James Staten told Forbes. “And it wouldn’t be a surprise if most of that bloodletting happened on the Sun side.”

Long a partner to the big server makers, the networking equipment giant today became a competitor, announcing an aggressive push into the server market. No longer content to peddle switches and routers alone, Cisco (CSCO) is now selling what it calls a unified computing system–a full-blown data center solution that encompasses everything from servers and storage to connectivity and virtualization services. The move is a brazen challenge to IBM (IBM), HP (HPQ) and other vendor partners with whom Cisco had once cooperated. “We’re going to compete with HP,” Cisco CTO Padmasree Warrior told The Wall Street Journal. “I don’t want to sugarcoat that. There is bound to be change in the landscape of who you compete with and who you partner with.”

Of course, but “change” is rather a tame word for a potentially market-disrupting expansion of Cisco’s business. This is a power grab, plain and simple. A game-changer. Cisco is offering an integrated approach to what’s long been a multivendor arrangement. Whereas before, CIOs would purchase servers from one company, virtualization software from another and networking from yet another, the networking giant is proposing they now purchase them together from a single vendor: Cisco. And that puts it on a collision course with IBM and HP.

“H-P, IBM and Cisco are the new four horsemen of IT infrastructure and they are all fighting to increase their share of the enterprise IT wallet,” Forrester Research analyst James Staten told Marketwatch. “They have all benefited from growth of the market and by taking share from weaker players, but are now needing to go after each other’s strongholds to keep growing. They are definitely leveraging technology evolutions that drive unification, so customers win through this competition, but it’s going to be a bloody fight.”

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.”

Point taken. Certainly, we’re not going to see the recession inspiring companies to suddenly shutdown their e-commerce operations or disable Salesforce in aid of their longevity. But that doesn’t mean the Grim Reaper of the “Next Economy” isn’t going to sweep this latest crop of Webvans and Scients off into the abyss, and from there into the pages of a 2013 Fast Company article.

That said, take it from Colony: Don’t worry, be happy.

[Image Credit: Sequoia Capital via VentureBeat]

Shares in the company slid still deeper into the mud today as the market reflected on the uneventful conclusion of the company’s merger talks with Microsoft (MSFT) and its decision to–well, let’s face it–become a reseller of Google (GOOG) ads. In early trading, Yahoo’s stock, which plummeted 10% in late trading yesterday, fell another 6% to around $22. And it’s likely to fall further still, with financial analysts taking swings at it like kids at a piñata.

“This deal diminishes Yahoo’s relevance among advertisers and strengthens the hand of a key competitor,” analyst Mark May of Needham & Company told clients in a research note today.

And over at Cantor Fitzgerald, analyst Derek Brown agreed. “We remain concerned about the long-term implications of this deal for Yahoo,” he said. “While the company should reap a near-term financial windfall with Google by its side, it seems to be sacrificing its vision of becoming a ‘must buy’ for online advertisers. After all, doesn’t this deal make Google, not Yahoo!, the ‘must buy’ for online advertisers?”

Jeffrey Lindsay of Bernstein Research says the deal is a litigation nightmare waiting to happen. “We think at a minimum that the current deal will result in further lawsuits, which Yahoo will ultimately have to settle, further impacting the economics of the deal,” he said.

And analyst Laura Martin of Soleil Securities Group says it’s just a nightmare, plain and simple. “Execution issues become more challenging as talent continues to stream out the door,” Martin said in a research note. “With the collapse of the Microsoft deal, Yahoo employees lost (in addition to shareholders), and we expect Yahoo’s employee turnover to accelerate as its share price falls and their stock options are way underwater. Shareholder litigation may distract the board and senior management and will cost Yahoo shareholders more money.”

And Shar VanBoskirk, an analyst with Forrester Research (FORR), well, she reacted as I imagine many observers did–with a slow shake of the head. “It’s a great deal for Google,” she told BusinessWeek . “I have no idea what Yahoo’s thinking.”

If it was thinking at all … Said Mark May, an analyst at Needham & Co., “This just reaffirms the view that Yahoo, and particularly Jerry Yang and David Filo, blew it. It’s hard to see how this management team is going to be able to extract or create value anywhere near 33 bucks a share anytime soon.”

In an astonishingly unimaginative report called “The Future of Apple Inc.,” Forrester attempts to divine the products Apple will be peddling five years from now. “Apple will aim to become the hub of the digital home, offering eight key products and services to connect PCs and digital content to the HDTV-stereo audio-visual infrastructure in consumers’ homes,” Forrester explains. “To fulfill this strategy, we predict that Apple will launch new products, re-engineer the Apple Store, and expand into in-home installation services.”

Sadly, the speculative product and services roadmap Forrester has devised seems more a roadmap to ruin than anything else, and a laughable one at that. Among the products the company sees Apple developing by 2013:

• A network-enabled “clock radio”
• An AppleSound universal music controller
• A digital picture frame
• A “Genius Bar” that makes house calls just like the Geek Squad.

Huh. So Apple, after reinventing the desktop UI, the digital media player, and the phone, will set its sights on the lowly clock radio and picture frame. Really? If Apple’s product dev team pitched Forrester’s clock radio idea to CEO Steve Jobs, he would probably hurl them one-by-one into rush-hour traffic from the roof of 1 Infinite Loop.