The Yankee Group Predicts Recovery in IT Spending for 2002

The year 2001 was a weak one for IT spending, but next year will be better.

BOSTON - The year 2001 has been a dismal one for the technology industry. Layoffs, bankruptcies, and losses seem to be the only news being reported. The E-Sourcing Strategies research and consulting practice at the Yankee Group has recently published a Report entitled "IT Spending: Taking a Momentary Breather, Before Reaccelerating," which analyzes IT spending patterns and predicts future spending trends. IT spending in the United States from 1990 to 2000 grew steadily-it even grew during the 1991 recession.

While the IT industry has not seen a decline in spending since 1954, the Yankee Group expects 2001 to show a 1.1% decline. The good news is that growth will return in 2002, and the recovery will occur because supply and demand for technology are very tightly aligned. Spending cannot be delayed because, for the most part, IT is consumed when needed, with no buffer inventories. Andy Efstathiou, program manager at the Yankee Group and author of the Report, predicts: "In 2002 IT spending will recover, led by increases in software and services." Efstathiou went on to say: "Spending will concentrate on reducing environment complexity, increasing application integration, and implementing more customer-facing solutions to drive revenue and cost control through higher professional productivity and more efficient installation methods and techniques. Spending in these areas will be huge because they drive value for users."

The Yankee Group (www.yankeegroup.com) As a global leader in technology research and strategic consulting, the Yankee Group provides accurate, reliable, and trusted research; custom consulting; and personalized one-to-one client interaction encompassing all areas essential to business success: Internet, electronic commerce, communications, wireless, computing, and enterprise applications. Now in its fourth decade, the company is headquartered in Boston and maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.