November 4, 2009 – Market research firm Gartner Inc. is recommending technology and service providers aim marketing campaigns at chief financial officers and strategic business unit leaders next year, based the results of a new report.
Industry vertical market IT spending will contract by 6.8 percent in 2009, according the report “Dataquest Alert: Forecast, IT Spending in Industries, Worldwide, 3Q09 Update”. Analysts are predicting the market to turn around in 2010, however, with growth of 2.3 percent.
The prolonged recession has the potential to create a new market environment with stronger spheres of financial and business influence in many industries’ IT buying centers, according to Gartner research director Kenneth Brant.
The IT buying center has shifted as a result and CFOs and business leaders have become much more involved in monitoring returns from IT projects and IT decision-making, said Brant. “Firms have realized that they can manage these costs and we think there’s going to be some lasting affects in the way CFOs are involved in looking at IT spending and strategic business units approve IT spending.”
Vendors should develop and/or expand financial models for project justification and sales training on targeting the financial buyer and business leader, Brant said. “We don’t expect 2010 to be a roaring recovery in the IT market. It’s probably going to take another year for companies to repair the balance sheet and bring the IT budget to where they typically were,” he emphasized.
The recession is not sector by sector, but an “all-sectors decline,” said Brant, “and it’s impacted the industry across the board.”
That said, some regions are holding up better in 2009. Asia/Pacific, the Middle East and Africa, and Latin America are showing signs of long-term growth through 2013, according to the report. IT spending growth for the regions is two to three times that of the worldwide average.
“Our worldwide cumulative average is 1.4 percent between 2008 and 2013,” said Brant. “For Asia/Pacific, Latin America, the Middle East and Africa it’s in the 3 to 4 percent range.”
For individual segments, financial services is expected to lead all industry vertical markets in terms of dollars spent in 2009, with $502.6 billion in total IT spending, according to the report. Analysts still predict an 8.3 percent segment decline however. Manufacturing and government are also predicted to remain two of the largest vertical sectors, but demonstrate similar negative growth in spending.
Agriculture, mining and construction, are predicted to have the steepest decline in IT spending this year with a 9.2 percent decrease, according Gartner’s release. The international government industry is also expected to demonstrate a decline, with the slowest IT spending decrease at 3.6 percent.
For more information on Gartner’s “Dataquest Alert: Forecast, IT Spending in Industries, Worldwide, 3Q09 Update” report click here.
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