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Technology: The Great Recession Snuffs Out the IT Boom
The IT industry was poised for explosive growth just prior to the fall of 2008 when the economy collapsed. That’s the conclusion of Forrester Research based on new numbers released by the US Department of Commerce.
New data shows that the amount of IT spending during 2007 and 2008 was higher than originally thought. But that period was followed by a drop in spending that appears to have bottomed out in the second quarter of 2009. But the decline in 2009 looks worse than what was originally predicted.
In early 2009 Forrester was predicting a 5.1 percent global decline in IT spending. That decline is actually closer to 9.3 percent. And the third quarter is shaping up to post a 13 percent decline over the the third quarter in 2008. Areas hardest hit include computer equipment, network equipment, and licensed software. Many companies in order to conserve cash stopped making investments in those areas and held onto their cash.
On the bright side though, Forrester is predicting that the worst is over and that spending will pick up in the last quarter of the year and into 2010.
