Forrester: Tech spending downturn is over

Software and computer equipment purchases will lead a recovery in 2010

The worst is over for technology spending and the sector is set to rebound this year, according to a new report from Forrester Research.

The analyst firm expects U.S. IT spending to grow by 6.6 percent in 2010 after plummeting 8.2 percent in 2009. On a global basis, IT expenditures will jump 8.1 percent in U.S. dollars and 5.6 percent based on local currencies.

Forrester is making its predictions even though final data for the fourth quarter of 2009 isn't in yet. It's basing that confidence on recent signs of economic recovery around the world, including strong earning reports from vendors such as Oracle and the increased availability of credit.

Although the sector will experience strong growth, this won't result in a full recovery across the board, according to Forrester's data. For example, while computer equipment purchasing will jump 9.2 percent, the overall level of spending will be lower than in 2008 or 2007.

But software is also expected to grow by 9.2 percent in 2010, which will negate the 7.4 percent drop experienced in 2009 and exceed 2008's level.

Communications equipment spending will remain comparatively weak, rising only 2.8 percent this year, according to Forrester.

Forrester's report also examines the possibility that a "double-dip" recession will occur this year following a short period of economic growth. There is a 15 percent chance of this happening, and if it does, tech spending will instead see a decline of 3 percent to 4 percent in 2010, Forrester said.

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Chris Kanaracus

IDG News Service
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