Gartner sees IT spends decline, India to be hit
The Financial Express – Corporates & Markets, April 2, 2009, PVIII
fe Bureaus, Mumbai
Indian IT firms will be adversely affected as worldwide IT spend is likely to dip further in 2009. According to Gartner, worldwide IT spending was forecast to total $3.2 trillion in 2009, a 3.8% decline from 2008 revenue of nearly $3.4 trillion. According to a report from the research firm, global IT spending will average 2.79% annual growth from 2008 through 2013. All key four segments of hardware, software, IT services and telecommunications will be experiencing a slowdown. However, software spending growth will remain somewhat positive at 0.3%, while hardware will be the worst hit, witnessing a decline of 14.9%. As IT services is likely to see a decline of 1.7% worldwide, it is expected that the Indian IT firms will be impacted in more ways than one.
“Indian IT firms are already hit and with further decline in IT spend globally, there will be further impact on their revenues. The pay cycle will become longer. Moreover, it might lead to cancellation of projects,” said Diptarup Chakraborti, principal research analyst at Gartner. “However, the mid-tier companies will be impacted in a greater way,” he added. According to analysts, with declining IT spending it will be difficult for companies to enter new markets and newer geographies. “IT firms are looking at newer markets, with reducing IT spends that would become difficult, and the IT firms have to pick and choose the markets keeping in mind the return on investments from those regions,” said Diptarup.Moreover, a worldwide declining IT spend might also affect the job scenario. According to analysts, performance tracking will get stringent and in a worst case scenario there could be retrenchment of jobs. According to Forrester, the purchase of IT products and services by US companies may decline 3.1% in 2009, as against its earlier projection of a 1.6% increase.
“The US recession keeps getting worse. Computer equipment purchases will continue to bear the brunt of cutbacks in tech investment, but purchases of network equipment, software licenses, and IT consulting services will also drop,” said the Forrester report.
The Financial Express – Corporates & Markets, April 2, 2009, PVIII
fe Bureaus, Mumbai
Indian IT firms will be adversely affected as worldwide IT spend is likely to dip further in 2009. According to Gartner, worldwide IT spending was forecast to total $3.2 trillion in 2009, a 3.8% decline from 2008 revenue of nearly $3.4 trillion. According to a report from the research firm, global IT spending will average 2.79% annual growth from 2008 through 2013. All key four segments of hardware, software, IT services and telecommunications will be experiencing a slowdown. However, software spending growth will remain somewhat positive at 0.3%, while hardware will be the worst hit, witnessing a decline of 14.9%. As IT services is likely to see a decline of 1.7% worldwide, it is expected that the Indian IT firms will be impacted in more ways than one.
“Indian IT firms are already hit and with further decline in IT spend globally, there will be further impact on their revenues. The pay cycle will become longer. Moreover, it might lead to cancellation of projects,” said Diptarup Chakraborti, principal research analyst at Gartner. “However, the mid-tier companies will be impacted in a greater way,” he added. According to analysts, with declining IT spending it will be difficult for companies to enter new markets and newer geographies. “IT firms are looking at newer markets, with reducing IT spends that would become difficult, and the IT firms have to pick and choose the markets keeping in mind the return on investments from those regions,” said Diptarup.Moreover, a worldwide declining IT spend might also affect the job scenario. According to analysts, performance tracking will get stringent and in a worst case scenario there could be retrenchment of jobs. According to Forrester, the purchase of IT products and services by US companies may decline 3.1% in 2009, as against its earlier projection of a 1.6% increase.
“The US recession keeps getting worse. Computer equipment purchases will continue to bear the brunt of cutbacks in tech investment, but purchases of network equipment, software licenses, and IT consulting services will also drop,” said the Forrester report.
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