IT spend to fall in 2009

Singapore - The IT industry will not be spared the global slowdown with companies projected to slash their IT spend in 2009.

IT consultancy group Gartner has lowered its September 2008 growth prediction in global IT spend from 5.8% to 2.3% for 2009, but expects the market to go up again the year after, forecasting global growth at 5.6 % in 2010.

"In a worst case scenario, our research indicates an IT spend increase of 2.3% in 2009, down from our earlier projection of 5.8 percent," said Peter Sondergaard, senior vice president at Gartner and global head of research. "Developed economies, especially the US and Western Europe will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009, the United States and Japan will be flat."

Instead of focusing on cutting costs as a stopgap measure, Gartner said companies should think about where they need to invest their money to ride out the current economic turmoil.

One such area is the modernisation of IT infrastructure.

Gartner said that technologies such as virtualisation would allow firms to combine different resources on to a single platform and provide better and more efficient services to customers.

"We learned that in tumultuous times, CEOs want their executives and managers to be advisors and counselors, not just great implementers of directions given to them," Sondergaard said. "What they want now most of all is agile leadership. Leadership that can guide us through simultaneous cost control and expansion at the same time."

Gartner previously predicted IT spend for 2009 to slow with the economic downturn, but its effects will not be as dramatic as during the dot-com bust.

Emerging markets such as China will remain a key investment location for many vendors and countries such as Vietnam, Pakistan, Indonesia and the Philippines are also expected to ramp up their IT capabilities in the next few years.