Category: Spending

The worldwide IT economy will rebound strongly by 2006, according to Gartner Inc. Chief Executive Officer Michael Fleischer who claimed that most enterprises will soon change their strategic focus from cutting costs and protecting profits to aggressively driving growth.

51% of survey participants said they expect the recovery to begin before the end of Q2 2004. Just under 70% think a recovery will begin before the end of the Q3 2004.

Companies and individuals in Singapore will spend US$3.2 billion on computer hardware, software and services next year, up by a good 4.3% over 2003. Singapore will see US$486 million being spent on packaged software next year, up a robust 7% over 2003,’ an IDC official told BizIT. That is noteworthy because packaged software sales will shrink 2.7% overall this year over 2002. Next year, Singaporeans will spend US$1.55 billion on buying new hardware, up 3.8% over 2003. Worldwide IT spending is set to grow 5% to US$916 billion, and spending on telecom services will go up 4% to US$1 trillion in 2004, says another IDC study.

IDC has said it expects China’s IT market to grow by 20% per year with software sales reaching $30.5 billion by 2005. Chinese software market was $800 million in 2002 and is expected to grow 25% a year.

SBs may be overly optimistic about the future, as they have expanded their workforce by 5% over the past year and have increased IT spending by 11% over the same time. Nonetheless, the numbers are favorable for small businesses, as AMI finds that 84% of SBs now have Internet access, 43% have Web sites and 53% have high-speed Net access. AMI reports that the percentage of SBs with true CRM applications rose by 17.9% between 2002 and 2003. Forrester Research finds that at least 26% of small to medium-size businesses (SMBs) in North America have purchased CRM software this year.

Though the double-digit growth rates of the boom times, when the global IT budget grew by 10.8 and 10.4% during 1999 and 2000, may not repeat in the coming years, recent IDC findings project global tech spending will grow by 7-8.3% by 2006-07.

Worldwide IT spending is set for 5% growth to $916 billion
in 2004, while spending on telecom services will show 4% growth to $1
trillion. According to the new IT Black Book, which gathers IT spending data from 55
countries, total spending in 2003 will show a return to positive growth this
year in the United States and emerging markets, although worldwide growth will
remain inhibited by declines in Europe, Japan and Canada.

The 3Q03 Telecom Black Book shows that data services growth will be 16% in
2004, while telco spending on equipment will show a long-awaited recovery to
7% growth in 2004 and 11% in 2005. “The telecom industry will finally return
to increased equipment spending in 2004,” said Ludovica Bruno, telecom analyst
at IDC. “As the telecom winter gives way to a telecom spring, the rebound will
reach 16.5% growth by 2007.”
International markets, meanwhile, continue to offer improving prospects
and stability. “Latin America will see a recovery to 7% IT spending growth in
2004,” said Juan Orozco, IT market analyst. “This will include a rebound to
double-digit growth in IT services markets next year.”

Israel’s information technology services market totaled $1.214 billion in 2002, 9.3% less than the $1.34 billion in 2001, states a new IDC Israel report. IDC cites the following factors for the drop: smaller enterprise IT budgets, especially by small and medium-sized private companies; the drop in GDP; less investment in Israel; the ongoing state of war; and competition between IT services companies that led to lower sweeping lower prices in the sector. IDC states that 2002 was the third consecutive year in which Israel’s IT services market shrank. IDC predicts that the market will expand by a modest 2.7% over the next five years to $1.386 billion in 2007. IDC revised its forecast from late 2002, which predicted only a 2.7% drop in Israel’s IT services market in 2002, compared with a year earlier. IDC attributed the difference the worse than expected recession in 2002.

Expenditure on Information Technology (IT) in the six members of the Gulf Cooperation Council is expected to grow by 10.2% in 2004 to reach $4.2 billion, market research firm IDC reported. IT expenditure in Saudi Arabia will increase from $1.88 billion in 2003 to just over $2 billion in 2004 – a 6% growth. IT expenditure in UAE will increase from $1.04 billion in 2003 to $1.15 billion in 2004 – a 10.6% growth. IT expenditure will grow by 7.6% in Oman and 12.9% in Qatar.