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Forrester Research and ITIC are predicting 2010 is going to be a good year for IT

By annie shum | January 12, 2010

Forrester Research and ITIC are predicting a good year for IT, with spending up 8.1 percent worldwide to more than $1.6 trillion. Forrester said the IT industry is entering a six- or seven-year cycle of what it calls Smart Computing. ITIC found pent-up demand for investments to control costs and improve infrastructure. Hiring is expected to rise.

IT industry, get ready to rejoice. According to two new reports, 2010 is going to be a good year. A report from Forrester Research and a soon-to-be-released survey from Information Technology Intelligence Corp. (ITIC) point to a recovery for IT. The Forrester study said U.S. spending on IT will grow 6.6 percent this year to about $570 billion, following an 8.2 percent decline in 2009. On a global level, the report predicts a rise of 8.1 percent to more than $1.6 trillion.

“The technology downturn of 2008 and 2009 is unofficially over,” said Forrester Vice President Andrew Bartels, adding that “the tech recovery will be much stronger” than the overall economic rebound.

The Era of ‘Smart Computing’

Forrester described the IT industry as now entering a six- or seven-year cycle of “growth and innovation” that it calls Smart Computing. The research firm sees the keys of Smart Computing as the marriage of new “technologies of awareness” with advanced business analytics, resulting in a more widespread use of service -oriented architecture, server and storage visualization, cloud computing, and unified communications .

The key areas of hardware and software will drive the growth, the Forrester report said. It projected global purchases of computer equipment to be up 8.2 percent, communications 7.6 percent, software spending 9.7 percent, IT outsourcing 7.1 percent, and IT consulting and systems integration services 6.8 percent.

The strongest growth in dollars is expected to be in Western Europe, rising 11.2 percent. That rise is due, in part, by the decline of the dollar versus the euro. By a similar measure, IT will also grow in Canada, Asia Pacific, and Latin America, by 9.9, 7.8, and 7.7 percent, respectively. Eastern Europe, the Middle East, and Africa are projected to grow only 2.4 percent. However, when judged by its own currency, the U.S. will see the largest growth.

Back To ‘Business of Doing Business’

Laura DiDio, a research fellow with ITIC, said a soon-to-be-released survey from her company shows similar trends. “Things seem to have bottomed out in terms of cost cutting,” she said. “Now people are getting back to the business of doing business.” One of the questions in the survey asked 650 IT managers if their budget would increase in 2010. About 27 percent said yes — more than twice the percentage who responded affirmatively last year. About 37 percent of respondents said it will remain at about the current level.

DiDio’s survey found that the biggest areas for expenditures will be in controlling costs, improving infrastructure , security , virtualization and disaster recovery. “There is pent-up demand,” she noted, to make investments for upgrades, efficiency , storage and backups, as well as for new applications to support business.

In terms of hiring, the ITIC survey found that about 47 percent will maintain their current levels, about 25 percent will hire additional staff, and only three percent said they were planning layoffs.

By Barry Levine January 12, 2010 10:32AM

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