Global tech recession is over, Forrester says

12 Jan 2010

The technology industry recession is unofficially over and globally the industry will see a recovery in 2010 as businesses and governments around the world renew spending on IT, tech analyst Forrester has said.

After declining 8.2pc in 2009, US IT spending will grow 6.6pc in 2010 to $568 billion. Global IT spending, which dropped 8.9pc last year, will rise 8.1pc in 2010 to more than $1.6 trillion.

Software and computer hardware will see the greatest growth, as Forrester forecasts a new multi-year cycle of technology investment growth and innovation defined by smart computing.

“The technology downturn of 2008 and 2009 is unofficially over,”said Andrew Bartels, Forrester Research vice-president and principal analyst. “All the pieces are in place for a 2010 tech spending rebound. In the US, the tech recovery will be much stronger than the overall economic recovery, with technology spending growing at more than twice the rate of gross domestic product (GDP) this year.”

Forecast increases

With regard to sector growth, hardware and software will lead the charge. Measured in US dollars, global purchases of computer equipment will be up 8.2pc, communications equipment buying will rise by 7.6pc, software spending will increase by 9.7pc, purchases of IT consulting and systems integration services will grow by 6.8pc, and IT outsourcing services will be 7.1pc higher.

On a regional basis, Europe will be the strongest performing region. Measured in US dollars, the strongest growth in 2010 will be in Western and Central Europe, where tech purchases will rise by 11.2pc, boosted by the dollar’s decline against the euro.

IT purchases in Canada will grow by 9.9pc, Asia Pacific by 7.8pc, and Latin America by 7.7pc. The weakest market will be Eastern Europe, the Middle East, and Africa, with an increase of just 2.4pc. When measured against local currency, however, the US will actually post the strongest growth of all the regional tech markets.

“We are entering a new six- to seven-year cycle of IT growth and innovation that Forrester calls smart computing,” said Bartels.

“New technologies of awareness married to advanced business intelligence analytics make computing smart. Smart computing rests on new foundation technologies, such as service-oriented architecture, server and storage virtualisation, cloud computing, and unified communications. (The year) 2010 marks the beginning of this next phase of technology advancement,” Bartels added.

By John Kennedy

Photo: The technology industry will see a recovery in 2010 as businesses and governments worldwide renew spending on IT, tech analyst Forrester suggests

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years