Gartner: 'Worst year ever' for IT spending

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>> Lecturer: From all angles this is perhaps the most challenging and most interesting years that we will experience in our life time. The IT market is exiting, its worst year ever. Global enterprise spending on IT is going to decline 6.8 percent this year. And the IT industry measured in dollar terms will actually not recover until 2012 to the 2008 revenue levels. In 2009 enterprise IT spending will end up being 2.3 trillion dollars compared with 2.5 trillion dollars in 2008. Spending has actually declined in all markets and therefore as a user you've saved across hardware, across software, across telecommunication services and IT services. Now compared with previous negative economic cycles the impact has actually been felt all across every single vertical industry. And so let me show you how IT spending has actually evolved since 2001, which was out last crisis. Now here what you see is each bubble represents spending in a vertical industry. The size of the bubble represents the size in dollar terms of IT spending in that industry. Now watch how spending evolves as each...as it grows you will see each industry finding itself up in the upper right hand corner.

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>> Lecturer: Now what is most important in this is to watch the impact of the economic crisis that we've just gone through pause Background noise Now that's a drop and then look at how the recovery will play itself out over the next couple of years. Now the increased spending from a vertical industry prospective will happen in health care, in utilities and in government. And as Gene said across the globe government spending, federal government spending on IT has become the new emerging market. Now we could also look at this from another prospective, let's look at spending as it impacts economic regions, now here you'll first clearly see the crisis of 2001 and 2002. Then what you'll see is the recovery...

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>> ...and then the collapse. Now this is shown in dollar terms and therefore you get some interesting currency movements that impact these bubbles so for example you see Japan doing better but what you will see is that emerging regions rapidly resume strong growth and that by 2012 the accelerated spending on IT will actually start to drive a culturally different approach to technology that will start to impact both product features, service structures and the overall IT industry. Silicone Valley is no more in the driver's seat. Now 2010 budget planning is actually done on the background, therefore, of the worst year ever in the IT industry, 2010 is about balancing cost, risk and growth. You, therefore, need to be prepared, you have to plan for growth, global GDP is forecast to grow 2.2 percent and IT spending next year will grow 2.3 percent. However, for about half of you the IT budget will likely be zero or less in growth terms and it will only slowly recover in 2011.

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