Abandon All Hope, Ye Who Read These IT Forecasts

Published on February 25, 2009
by John Paczkowski

sad-facejpgMore gloomy predictions for the IT market. Market research firm IDC just updated its forecast for world-wide IT spending in 2009, and suffice to say, it’s not pretty. The continued downward spiral of the economy has so hampered growth that IDC now sees worldwide IT spending growing by just 0.5 percent year over year, down from a November 2008 forecast of 2.6 percent growth. “The revised forecast is very close to the downside scenario we developed in November, which was based on the lowest worldwide GDP growth since World War II,” IDC’s Stephen Minton noted. “While the outlook for 2009 is now worse than we thought just three months ago, we still expect IT spending to recover somewhat in 2010 and gain momentum through the rest of the forecast period.”

A grim assessment, and it’s only the beginning.

Also on the decline, the world-wide chip market. Gartner (IT) and IDC (IDC) both say the semiconductor industry is on pace to see near-record revenue declines in 2009. Gartner is predicting a 24.1 percent drop from 2008 revenue. IDC is a bit more optimistic. It’s forecasting a decline of just 22 percent. Neither firm sees things improving much for some time. Said Bryan Lewis, research vice president at Gartner, “We believe that the financial crisis has reset the semiconductor market. After the 2001 recession, in which semiconductor sales plummeted by a record 32.5 percent, semiconductor sales took about four years to get back to 2000 levels. The rebound after this recession will be similar to that in 2001 because there will be three years of modest growth after the worst year.”

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