Feeds

Gartner: Global IT spending will rise in 2009 (slightly)

Uneven meltdown

Build a business case: developing custom apps

While IT spending is projected decline in some industries in 2009, the prognosticators at Gartner are thus far saying that despite the economic meltdown, IT spending across all industries and geographies will rise a tiny bit. Some industries and geographies are going to do better than others, of course. And there are some areas that are not going to see growth at all.

Gartner this week put out a report called Dataquest Alert: Utilities, Healthcare and Government Lead IT Spending Growth in Challenging 2009, providing some dicing and slicing of IT spending with an industry and regional flavor, in contrast with to the traditional high-level IT spending projections Gartner, IDC, Forrester, and others do.

As a teaser for the report, Gartner put out some of its models of IT spending for 2008 and 2009. Here's an interesting table that shows IT spending for last year and projections for this year by industry:

 

2009

2008

Change

Industry

IT Spending

IT Spending

2008-2009

Utilities

$131.8bn

$128.1bn

2.9%

Healthcare

$88.0bn

$86.1bn

2.2%

Government

$428.3bn

$419.5bn

2.1%

Communications

$371.5bn

$268.3bn

0.9%

Education

$60.0bn

$59.3bn

1.0%

Agriculture, Mining & Construction

$29.7bn

$29.4bn

0.9%

Services

$192.6bn

$190.3bn

1.2%

Retail Trade

$153.8bn

$153.3bn

0.3%

Transportation

$105.8bn

$105.1bn

-0.2%

Financial Services

$554.4bn

$558.5bn

-0.7%

Wholesale Trade

$81.4bn

$81.2bn

0.4%

Manufacturing

$479.6bn

$482.7bn

-0.6%

Total

$2,676.8bn

$2,662.8bn

0.5%

Source: Gartner

 

 

 

As you can see, only three industries are going to see "negative growth," as IT prognosticators are apt to say because they are allergic to the word "decline." And it has to be pointed out that the data shown above is global IT spending by industry when reckoned in U.S. dollars.

"The economic slowdown triggered by the U.S. subprime market crisis, along with fluctuating oil prices and currency exchange rates impacted many industries and countries around the world in IT spending," explained Gartner research vice president John-David Lovelock in announcing the report. "Internal spending, hardware, and system integration in the financial sector were particularly hard-hit in 2008 and will continue suffering through 2009. In contrast, healthcare grew 8.3 percent worldwide in 2008, and utilities grew 7.7 percent."

Lovelock says the uneven impact of the economic meltdown will continue to be reflected in uneven IT spending growth or decline across industries. Healthcare, utilities, and government IT spending are going to get the lion's share of the growth this year, it looks like, and for all the talk of declines in IT spending among financial services companies, the declines are more modest than perhaps many would have expected, given the dire straits many companies are trying to negotiate through.

Lovelock says that financial services companies in the U.S. will be hit hard, and their IT spending will reflect this. But he explains that some of the declines will be mitigated because the meltdown wasn't as difficult for banks, brokerages, and insurance companies in the Middle East, Mexico, and Canada.

In the United States, the economic stimulus package signed into law last week by President Obama is helping out the utility, communications, and healthcare industries. The bill includes tens of billions of dollars in spending related to expanding broadband Internet coverage, modernizing health records, and retrofitting the electrical grid with some embedded computing intelligence to make it run more efficiently.

When you add it all up, Gartner is projecting that IT spending (in which it dumps hardware, software, services, telecom, and other stuff) will grow by 0.5 per cent in 2009 to just under $2.7 trillion. Spending in the United States, even after the effect of the economic stimulus law, is only going to rise by 0.1 per cent, says Gartner, with spending among healthcare companies rising by 2.6 per cent (faster than the global average) and financial services companies seeing a 2.2 per cent decline in the States (more than three times the global decline).

Gartner is forecasting that IT spending in the EMEA region will decline by 0.3 per cent (utilities do the best and services firms do the worst), while rising 4.4 per cent in Latin America and 2.9 per cent in Asia/Pacific. Brazil, India, China, Argentina, Chile, and Peru will lead the IT spending charge in these two regions, but Japan is expected to see a 0.1 per cent IT spending decline this year.

Of course, the kind of growth you see depends on how you count up the sales. As a recent IT spending forecast put out by rival Forrester back in mid-January pointed out, it makes a difference whether you count sales in the local currencies where the IT gear is being acquired or convert it back to U.S. dollars (as the biggest IT players certainly do). Forrester expects IT sales worldwide to contract 3 per cent in 2009 when measured in dollars, but when measured in local currencies, they'll rise by 2.5 per cent.

Gartner did not provide a reckoning of its own numbers in local currencies, but the same currency exchange rates prevail; that doesn't mean the underlying assumptions and numbers for spending in their respective models bear much of a resemblance. Gartner is counting a lot more things as IT spending than Forrester, which said back in January that the IT market will hit $1.66 trillion in 2009, down 3 per cent compared to 2008's spending, versus Gartner's $2.68 trillion, up 0.5 per cent. ®

The essential guide to IT transformation

More from The Register

next story
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
True fact: 1 in 4 Brits are now TERRORISTS
YouGov poll reveals terrible truth about the enemy within
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?