Gartner cuts 2010 IT spending forecast

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Gartner cuts 2010 IT spending forecast

The European debt crisis is playing a key role
By Chris Kanaracus | Published: 01:00 GMT, 02 July 10

Gartner has dropped its 2010 IT spending forecast, citing currency fluctuations caused by the ongoing European debt crisis.

Global IT spending will total $3.35 trillion this year, a rise of 3.9 per cent over 2009. Gartner had originally forecast a growth rate of 5.3 per cent.

The dollar has grown stronger against the euro of late, placing “downward pressure on U.S.-dollar-denominated IT spending growth,” Gartner research vice president Richard Gordon said in a statement.

The debt crisis could have a longer-term effect on IT spending in Europe as public-sector organisations try to balance budgets and shed debt, activities that would in turn have an effect on private businesses, he added.

But overall, the revised global forecast needs to be placed in proper context, Gordon wrote in a blog post. For one, Western Europe covers less than 25 percent of worldwide IT spending, and other parts of the world have more positive outlooks, he said.

“Even stringent cutbacks in public sector IT spending in Western Europe, which would see projects being cancelled or postponed indefinitely and departmental budgets being slashed by as much as 25 percent per year, would likely only result in a 1 to 2 percent reduction in global IT spending with a marginal impact on growth at the worldwide level,” Gordon wrote.

“Fundamentally, we haven’t seen any big changes in IT spending in the short term,” Gordon said in an interview. “The bigger unknown is to what extent European economic growth will slow over the next five to 10 years.”

Meanwhile, the outlook for hardware sales remains positive, with spending set to grow to $365 billion this year, a 9.1 per cent jump over last year, according to Gartner. The increase is being driven by strong consumer purchasing of mobile devices as well as corporate spending on PC replacements and Windows 7 migrations, the research firm said.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris’s e-mail address is Chris_Kanaracus@idg.com

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