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IT spend up 1% in 2001 – IDC

11 September, telco hell, economic slump

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The "perfect storm" of the 11 September terrorist attacks, slowing global economy, and the telecommunications supply-demand mismatch, means that worldwide IT spending will only increase one per cent in 2001.

The figure comes from IDC which forecast spending growth will recover slowly to 5.5 per cent by the end of 2002. The year 2000 saw 12 per cent growth.

The analyst firm predicts hardware spending will decline 9 per cent this year, and a further 1 per cent drop will follow in 2002. But software and services spending growth will recover, to some extent, in 2002, with an upturn in the second half of the year expected to produce 2002 worldwide growth rates of 11 per cent for software and 9 per cent for services.

John Gantz, IDC chief research officer, said: "Hardware shipments have suffered most dramatically, as is always the case in an economic slowdown. This year, due to other factors, things have been even worse than anyone predicted."

The US slowdown has spread to Western Europe. Hardware spending there will show a decline of 4 per cent this year and will decline by a further 2 per cent in 2002. In Japan, PC spend is declining by 16 per cent this year.

According to IDC, software spending will recover to the strong growth rates of previous years, driven by investment in ebusiness and other areas. IT services will remain strong as well, recording 9 per cent growth worldwide this year despite the industry slowdown.

IDC's figures are the results of a study, Operation Beacon, set up to quantify the impact of the September 11 terrorist attacks, along with other economic factors, on the state of the worldwide IT market. ®

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