Yes, it’s been a bad year for IT budgets – the worst ever, in fact – but we should return to the lavish spending levels of 2008 … in 2012.
That’s the prediction of Peter Sondergaard, senior VP of research with Gartner, who says: “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 dollars and cents, that’s $2.3 trillion spent this year, compared to $2.5 trillion last year, which will be the level we reach again three years from now.
“Spending has actually declined in all markets,” he says, citing hardware, software, telecommunications and IT services. “Compared with previous negative economic cycles, the impact has been felt all across every single vertical industry.”
Recovery will be driven by IT spending primarily in health care, utilities and government. Sondergaard notes that IT budget planning for 2010 is being done “on the background, therefore, of the worst year ever, in the IT industry.”
“2010 is about balancing cost, risk, and growth,” he says, but expects that about half of all enterprise IT budgets will reflect zero growth or even less funding than for this year.
“By 2012 the accelerated spending on IT will begin to drive a culturally different approach to technology that will start to impact product features, service structures and the overall IT industry,” Sondergaard predicts. “Silicon Valley is no longer in the driver’s seat.”
To see Sondergaard’s brief speech on this, click here.