Aberdeen Predicts Rise in IT Spending in 2003

Research group says runaway growth of the late ‘90’s won’t be reduplicated.

Analyst firm Aberdeen Group predicts an increase in worldwide IT spending in 2003 and beyond. Not surprisingly, Aberdeen researchers indicated they don't expect the rampant IT spending growth that characterized the late '90s to happen again.

"The factors contributing to excessive growth in the late 1990s are not repeatable," Aberdeen researchers explained in a report issued last week. The analyst firm attributes the runaway growth that characterized the late ‘90s boom to a variety of unique factors, including corporate retooling for Y2K, Internet and e-commerce euphoria, excessive VC investment in Internet startups, along with traditional enterprises spending to keep up with dot-coms and unsustainable IT spending in the telecom sector.

For 2003, Aberdeen Group predicts a more modest 4 percent increase in worldwide IT spending, tied to economic growth and "basic business principles." Worldwide, Aberdeen anticipates $1.26 trillion in IT spending in 2003, growing to $1.44 trillion by 2006. In the United States, 2003 growth should be slightly off the pace of worldwide IT spending, at about 3.6 percent, the firm forecasts.

The company also predicts that software and services spending will increase at the expense of hardware spending from 2002 to 2006. Over that period, Aberdeen expects increases in spending for software at 27 percent, for services at 18 percent, and for hardware at 8 percent.

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.