IT Spending Forecasts: How Low Will They Go?


Remember back in November, when IDC scaled back its expectations of IT global spending growth from an original estimate of 5.9 percent to just 2.6 percent?


What, you blocked it out along with all the news of layoffs and other reminders of financial distress? Here it is, along with IDC analyst Stephen Minton's contention that companies wouldn't cut IT too deeply because it's "deeply embedded" in so many mission-critical functions. In fact, he said, companies would be under pressure to keep investing in IT in order to remain competitive.


Huh. In light of IDC's even grimmer revised forecast, that now seems a bit naive. (Not that there weren't other reports that seemed to confirm this view, like a late 2008 McKinsey Quarterly survey in which quite a few companies said they were still spending in an effort to gain advantage over weakened competitors.)


It now looks like fewer companies may take the approach of spending to get ahead. All Things Digital's John Paczkowski reports that IDC foresees IT spending growth of just 0.5 percent this year. Still, says Minton, looking for a silver lining in an awfully dark cloud:


While the outlook for 2009 is now worse than we thought just three months ago, we still expect IT spending to recover somewhat in 2010 and gain momentum through the rest of the forecast period.


IT spending forecasts have been notably all over the board for the past three months or so. I think it just proves how tough it is to make any kind of economic predictions during a global financial crisis the likes of which many of us have never seen in our lifetimes. The usual bets are off.