Gartner trims global IT spend forecast

By : |June 30, 2010 0

MUMBAI, INDIA: Global spending on technology in 2010 is likely to be lower than previously estimated because of the European debt crisis and the weakening of the euro against the dollar, research firm Gartner said on Thursday.

Gartner now expects this year’s IT spending to total $3.35 trillion, growing 3.9 per cent over last year, compared with its earlier forecast for a 5.3 per cent growth.

"The European sovereign debt crisis is having an impact on the outlook for IT spending," Richard Gordon, Gartner’s research vice president, said in a note.

The dollar’s rise against the euro in the second quarter was likely to continue in the second half of the year as well, pressuring dollar denominated IT spending growth, he added.

Longer term, public sector spending in Europe would be curtailed as governments battle rising budget deficits and debt over the next 5-10 years, Gordon said.

"Private-sector economic activity will also likely be hindered because of the direct impact of austerity measures on key government suppliers and the indirect impact caused by the ‘ripple effect,’" he said.

Spending on IT services would likely rise 2.9 per cent to $786 billion, while software would show a 3.1 per cent increase to $229 billion, Gartner said.

Global spending on computing hardware was likely to rise 9.1 percent to $364 billion, as Gartner expects personal computer shipments to remain robust in 2010 and 2011.

(Do you think European debt crisis will result in another round of economic crisis for Indian IT companies? Please post your comments in the space below)

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