Aberdeen Forecasts Solid IT Spending

Is IT spending taking a nosedive? According to a recent report from Aberdeen Group, the answer is no. In its forecast “Worldwide Technology Spending 2001-2005: Forecast and Analysis for Hardware, Software and Services,” the Boston-based company predicts that worldwide IT spending will grow at a compounded annual growth rate of 9.8 percent. By 2005, the worldwide IT market is expected to reach $1.75 trillion.

North America, the largest market for IT products and services, is forecasted to experience a near term growth rate of 8.5 percent over the next year, despite slowdowns in the U.S. economy. Japan, another big player, is expected to grow by only 5.9 percent. Nevertheless, the largest raw dollar expenditures will continue to be in North America, Japan and Western Europe.

But the buck doesn’t stop there. Emerging markets in countries such as Latin America, Asia, the Middle East and Africa are expected to have the strongest IT growth opportunities.

Bigger spending growth numbers are expected in the Asia Pacific Rim, with regional IT spending slated to exceed 11 percent. Both India and China are also expected to show strong growth numbers, reaching over 20 percent of total annual hardware, software and services spending growth over the near term.

"Despite short-term fluctuations in major markets, global technology spending will [be] ... buttressed by strong demand in Western Europe, North America and Asia," says David Wright, Vice President of Aberdeen Group's Private Equity Services division. "Spending on Internet-infrastructure-related projects in the U.S., Western European and Asian markets remains healthy. Moreover, recent traction experienced in customer support and sales force automation segments will continue to be positive in the world's top tier markets as organizations experience positive short-term return on investment."

The “Worldwide Technology Spending 2001-2005: Forecast and Analysis for Hardware, Software & Services” report was based on an analysis and forecast of 157 countries. For more information, visit www.aberdeen.com.