IT Was the Worst of Times: Gartner Says 2009 IT Spending Worst Ever

By Jessica Davis  |  Posted 2009-10-20 Email Print this article Print
 
 
 
 
 
 
 

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And if you are expecting big relief in terms of a rebound of IT spending in 2010, think again. Gartner says the industry won't reach 2008's spending levels again until 2012. The analyst firm breaks out spending and forecasts in major IT categories, and identifies major trends in IT spend going forward.

It was the worst of times. Gartner says that IT spending experienced its worst year ever in 2009—worse even than in 2001—on pace to decline 5.2 percent for the year.

And in the enterprise space specifically, things were even tougher with a decline in IT spending of 6.9 percent.

But Gartner says the IT industry will return to growth in 2010, just don’t expect much. The IT industry can look forward to a measly 3.3 percent increase from 2009, growing to $3.3 trillion. The market won’t return to 2008 revenue levels until 2012, according to the firm.

"2010 is about balancing the focus on cost, risk, and growth," says Peter Sondergaard, senior vice president at Gartner and global head of research, in a prepared statement. "For more than 50 percent of CIOs the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011."

Things have been toughest on the hardware side of the computer market. Gartner says that worldwide computer hardware spending will total just $317 billion this year, a 16.5 percent decline, and in 2010 hardware spending will remain flat. Worldwide telecom spending is on pace to decline 4 percent this year and is forecast to grow by 3.2 percent in 2010.

Gartner forecasts IT services spending to total $781 billion in 2009 and to grow 4.5 percent in 2010.  Software spending will decline 2.1 percent in 2009, but is expected to grow by 4.8 percent in 2010.

Three big trends will shape the IT spending and operational infrastructure in 2010, according to Gartner—a shift in IT budgets to more opex from capex, the ramifications of an older infrastructure made up of older IT hardware, and the need for IT to create business cases for spending.

Gartner says the shift from capital expenditure to operational expenditure in IT budgets will be accelerated by emerging cloud services and will make IT costs more scalable and elastic.

The second trend comes from delays in computer hardware upgrades. As business has delayed buying servers, PCs and printers, and is expected to continue to keep wallets closed in 2010, they need to look at the impact of increased equipment failure rates. "Approximately 1 million servers have had their replacement delayed by a year. That is 3 percent of the global installed base. In 2010 it will be at least 2 million," Gartner says.

"If replacement cycles do not change, almost 10 percent of the server installed base will be beyond scheduled replacement by 2011," Sondergaard says. "That will impact enterprise risk. CFOs need to understand this dynamic, and it’s the responsibility of the CIO to convey this in a way the CFO understands."

Third, Gartner says that IT needs to build compelling business cases—something that reseller channel partners have already found themselves doing more of in the last year. Gartner says: "2010 marks the year in which IT needs to demonstrate true line of sight to business objectives for every investment decision. IT leaders can no longer look at IT as a percentage of revenue. CIOs must benchmark IT according to business impact."
Gartner says that three areas will continue to dominate IT agendas in 2010: business intelligence, virtualization and social media.  

Further, Gartner says the following three areas will become key to IT agendas in the future:

  • Context-aware computing, which Gartner says means leveraging information about the end user—such as location, social attributes or other environmental information—to improve the quality of the interaction.
  • Operational technology, which Gartner defines as devices, sensors and software used to control or monitor physical assets and processes in real time to maintain system integrity.
  • Pattern-based strategy. Gartner says this is "a new model about implementing a framework to proactively seek, model and adapt to leading indicators, often termed 'weak’ signals, that form patterns in the marketplace, and to exploit them for competitive advantage." This technology is expected to help organizations figure out the emerging risks that come from changing patterns as well.

 

 
 
 
 
Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com
 
 
 
 
 
























 
 
 
 
 
 

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