IT Spending May Rise Despite Economy

Charlene OHanlon

The next wave of IT spending may or may not be coming, depending on how you look at it. According to Gartner, worldwide enterprise IT spending is expected to increase 2.9 percent this year, but the research firm is also cautioning technology providers to plan for a worst-case scenario for the year ahead.

'We're advising our technology provider clients to prepare business plans for 2011 on the basis of our most-likely scenario for enterprise IT spending growth - 3.5 percent. However, they should act now to develop contingencies to mitigate the risk of zero growth in 2011, a scenario that carries a lower probability but a much-higher potential impact, said Kenneth Brant, research director at Gartner. 'The bottom line is that technology providers need to be prepared for the worst case, where commercial IT markets stagnate and governments transition to fiscal austerity programs.'

Now that's a comforting thought.

When a research firm advises people to prepare for another rice-and-beans year, there's trouble ahead. IT spending worldwide took a nose dive in 2009, plummeting 5.9 percent from 2008 spending amounts.

But not all is bad, Gartner says: So far, IT spending is on pace to increase 2.9 percent from last year. The utilities and government-national and international-sectors are expected to lead the way with an increase of 4.7 percent and 4 percent, respectively, followed, interestingly, by communications media and services at 3.6 percent.

With the right business model and vertical industry target, technology vendors and the IT professionals that work in those sectors can weather the economic storm. It's all a matter of planning, which maybe is what Gartner is saying with its advice to batten down the hatches.

At some point, the storm's going to pass. Until then, though, hunker down and dig in-rice and beans together make one complete protein.

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