Conquer The Wallstreet !!!: Spending in IT to slowdown; Microsoft to offer 0% Financing

The Current turmoil in worldwide financial markets will be affecting in company spending on information technology. A report was published on November 12, wrote that worldwide spending on information technology (IT) is expected to slow significantly next year because of the financial crisis.

Market intelligence firm IDC said worldwide IT spending will grow just 2.6 percent in 2009 compared with the previous year, down from the IDC's pre-crisis forecast of 5.9 percent growth. IDC expects IT spending to return to growth rates approaching 6.0 percent in 2012 but estimates more than 300 billion dollars in industry revenues will have been lost due to slower spending over the next four years.

The firm had also developed a "downside scenario" in the event the impact of the financial crisis is more pronounced. In this scenario, IDC lowered the forecast for worldwide GDP growth in 2009 to 0.3 percent, which is 1.5 percent lower than the current forecast and worse than any year since World War II. This produced a forecast of 0.1 percent growth in worldwide IT spending in 2009 with negative growth in the United States, Western Europe, and Japan.

While The Framingham, Massachusetts-based company said IT spending in the United States is expected to grow by just 0.9 percent in 2009, much lower than the 4.2 percent growth forecast in August. IT spending growth in Japan and Western Europe was also expected to hover around one percent in 2009.

The following chart shows that 35% of U.S. and Canadian IT organizations responded by cutting IT operational spending. However, the majority (54%) made no change, and 11% actually increased their IT spending between August and October.

The following chart shows that, according to our survey, 2009 IT operational spending will show zero growth at the median. At the 25th percentile (the bottom 25% of survey respondents), IT operational budgets will shrink by an expected 3%. But at the 75th percentile (the top 25%), IT operational spending will increase by 5%.

The following chart shows that the forecast for IT operational budget growth in 2009 will be at the lowest rate since 2004, when growth coming out of the previous recession was likewise flat. IT operational spending growth peaked in 2007 at 5.0% and then declined this year to 4.0%. As reported earlier in this study, however, a significant number (41%) of respondents do not expect to spend all of the money budgeted for this year, which means that the 2008 growth rate will almost certainly fall short of the budgeted 4.0% rate. That pessimism extends into 2009.

Gartner Inc, the world's leading information technology research and advisory company, on October 13, has slashed its global tech spending forecast for next year to growth of just 2.3 per cent.

The research outfit was forced to significantly downgrade its previous 5.8 per cent growth prediction for 2009 because of the financial storm currently thundering across the world’s economy markets.

IT spending will hit $3.5tr next year. Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune, according to Gartner's senior veep and head of research Peter Sondergaard.

Hardware will take the biggest hit, said Gartner, with overall sales dipping four per cent next year.

It predicts the IT service sector will be flat in 2009, telecoms will modestly grow 3.9 per cent, while software will rise 8.6 per cent, down from a 13.5 per cent revenue increase this year.

Tech spending in North America will climb a meagre 0.5 per cent compared to a previous forecast of 5.3 per cent growth, according to Gartner.

Western Europe IT spending will drop 0.8 per cent. The firm had previously forecast spending to grow 2.8 per cent in the region.

Meanwhile, the Asia Pacific will see an IT spending increase of 8.3 per cent, down from an 11 per cent growth prediction.

According to WSJ today, Microsoft Corp. will provide zero-percent financing for three years to qualifying customers buying between $20,000 and $1 million of its business-solutions products.

The software giant's move comes as lenders are tightening their technology-financing terms for businesses amid the global credit crunch.

ETFs/Stocks :

Intl Business Machines Corp.  IBM   $78.43  -1.31 (-1.64%)
Intel Corporation             INTC  $13.36  -0.16 (-1.18%)
Microsoft Corporation         MSFT  $19.52  -0.78 (-3.84%)
Dell Inc.                     DELL   $9.62  -0.88 (-8.38%)
Hewlett-Packard Company       HPQ   $29.43  -1.71 (-5.49%)
Advanced Micro Devices, Inc.  AMD    $2.31  -0.26 (-10.12%)
Sun Microsystems, Inc.        JAVA   $3.68  +0.06 (+1.66%)
Oracle Corporation            ORCL  $16.40  -0.07 (-0.43%)
SAP AG (ADR)                  SAP   $34.10  +0.20 (+0.59%)

Sources :

IT spending to slow in 2009: IDC

2009 IT Spending Forecast: No Growth

Gartner cuts 2009 IT spending forecast

Microsoft to Offer 0% Financing For Its Business Software

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