October 7, 2002, 12:00 AM

Worldwide IT spending won’t recover until Q2, Gartner predicts

Worldwide IT spending will climb 3.4% in 2002, with revenue totaling $2.3 trillion, Dataquest Inc., a unit of Gartner Inc., reported today at Gartner Symposium/ITxpo 2002.

 

Worldwide IT spending will climb 3.4% in 2002, with revenue totaling $2.3 trillion, Dataquest Inc., a unit of Gartner Inc., reported today at Gartner Symposium/ITxpo 2002.

"Our forecast shows that we are unlikely to see anything beyond normal seasonality before the second quarter of 2003," said George Shiffler, principal analyst for Gartner Dataquest’s computing platforms and economics research. "We expect the return to spending to begin with shorter-term less strategic items, such as PCs, low-end servers and infrastructure software that can help deliver more value out of systems and networks. However, the global economic situation is quite fluid and given the rising uncertainty surrounding the strength of global economic recovery, there are still significant downside risks to the industry."

IT services end-user spending grew less than 5% in 2001, and IT services vendors reported results for the first half of 2002 that will reduce growth slightly this year, Gartner said. Gartner Dataquest analysts said the market has experienced mixed results. "In the outsourcing area, management services are enjoying relatively healthy growth during this economic downturn because of an emphasis on cost reduction and efficiency enhancement," said Kathryn Hale, principal analyst for Gartner Dataquest’s IT services group. "On the other hand, consulting, development and integration are most often sold through discretionary project contracts that can be delayed or not done during a weak economy."

Much of the success from the hardware segment will be based on the performance of the PC industry. Gartner Dataquest analysts said the PC segment accounted for 53% of the total computer hardware market in 2001. While the PC market is forecast to experience a slight increase in 2002, other hardware segments are facing mixed results.

While the software industry is expected to return to positive growth in 2002, Gartner Dataquest analysts said the industry will recover at different rates. "In the short term, most demand will be for infrastructure software that can help deliver more value out of existing systems," said Roger Fulton, group vice president and worldwide director for Gartner Dataquest`s software program. "Packaged application spending will recover more slowly, as it is dependent on new business initiatives and higher levels of confidence in the business value of IT."

 

 

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