IT's recession could be bottoming out

Software offers long-awaited green shoots

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The information and communication industry could have hit the bottom and it is software which will lead us out of the trough.

The Organisation for Economic Co-operation and Development's report on ICT and its role in the recovery saw the first signs of an upturn in May/June. The group saw decline across all sectors of the technology market in the first quarter, but said things "were not a great deal worse than in 2001 to 2002 and some sectors have performed better than in the earlier period."

The OECD notes that Asian countries were particularly hard hit by the economic slump, but were also showing signs of recovery now. Hardware firms were hit harder than IT services and software companies, but overall the OECD believes the industry is in better shape now than it was in 2001/2002. The full report is available as a pdf from here.

The findings chime with a report from Gartner released yesterday, which also suggests the recovery will be driven by software firms. Gartner believes that the current freeze on capital infrastructure spending will drive increased spending on software as companies seek to squeeze more performance from their existing hardware.

It's not huge growth - Gartner predicts a 1.53 per cent increase in software spending in 2010, based on responses from 1,000 IT professionals. This figure is buoyed by Asia and Latin America, which expect growth of 4.3 per cent and 2.5 per cent, compared to a 2.06 per cent fall in North America. In Europe, software spending will grow by just 0.45 per cent. ®

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