IT Spending Will Drop In 2007 But Grow In 2009

IT spending will land at 2% in 2007, after 7% increases in 2005 and 2006. But hang on, because in 2009 it will reach double-digit growth. Forrester Research, a Cambridge, Mass.-based information technology research firm, reports that slow U.S. GDP growth usually leads to lower IT spending.

"Technology spending is currently very brittle. Without a 'must-have technology,' most businesses are only investing in technologies with tangible ROI. That means they will respond quickly if corporate revenues and earnings start to slow in an economic slowdown, which seems likely at some point in the next couple of years," said Andrew Bartels, vice president at Forrester Research.

"The good news is that we see this as just a slowdown in spending. The other piece of good news is that we are witnessing the emergence and maturing of a new generation of technologies. As companies start to find ways of using these technologies to drive big improvements in business results, the rush to emulate their success will lead to a rapid rise in technology spending after 2008," explains Bartels.

Taking a look at growth rate in specific areas Forrester reports the following:

  • Computer equipment will see a growth of 9% through 2008 and spending will rise to 11% in 2009-2010.
  • Software spending will stay at 6%.
  • IT services spending will continue to fall and reach 1% by 2008. However by 2009-2010 it will rebound to 13%.
  • IT outsourcing growth will slow in 2007-2009 to 6%.

Forrester Research


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