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| Gartner Dataquest Says Worldwide IT Spending Is On Pace To Increase 3 Percent In 2002 | ||||||||||||||||||||||||||||||||||||||||||||
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LAKE BUENA VISTA, Florida, October 7, 2002 - Worldwide IT spending will climb slightly in 2002, with revenue totaling $2.3 trillion, a 3.4 percent increase from 2001, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). Both enterprises and vendors are looking for positive signs of a return to corporate spending, especially in the United States.
These findings were presented today during Gartner Symposium/ITxpo 2002, which is taking place October 6- 11 in Lake Buena Vista, Florida. "Our forecast shows that we are unlikely to see anything beyond normal seasonality before the second quarter of 2003," said George Shiffler, principal analyst for Gartner Dataquest's computing platforms and economics research. "We expect the return to spending to begin with shorter-term less strategic items, such as PCs, low-end servers and infrastructure software that can help deliver more value out of systems and networks. However, the global economic situation is quite fluid and given the rising uncertainty surrounding the strength of global economic recovery, there are still significant downside risks to the industry." Worldwide IT spending is being led by the telecommunications sector (see Table 1), which is on pace to represent 58.4 percent of IT spending in 2002. IT services is the No. 2 segment, with end-user spending forecast to total $557.5 billion, followed by hardware spending at $323.3 billion. Table 1 Worldwide End-User Spending on IT Products and Services (Billions of U.S. Dollars)
Source: Gartner Dataquest (September 2002)
"The telecommunications segment is being driven by the fixed and mobile telecom services markets," said Dean Eyers, group vice president and worldwide director for Gartner Dataquest's telecommunications group. "Combined, these telecom services segments are forecast to grow 8.8 percent in 2002. Absent them, and total IT spending would actually decline by 0.5 percent." IT services end-user spending grew less than 5 percent in 2001, and IT services vendors reported results for the first half of 2002 that will reduce growth slightly this year. Gartner Dataquest analysts said the market has experienced mixed results. "In the outsourcing area, management services are enjoying relatively healthy growth during this economic downturn because of an emphasis on cost reduction and efficiency enhancement," said Kathryn Hale, principal analyst for Gartner Dataquest's IT services group. "On the other hand, consulting, development and integration are most often sold through discretionary project contracts that can be delayed or not done during a weak economy." Much of the success from the hardware segment will be based on the performance of the PC industry. Gartner Dataquest analysts said the PC segment accounted for 53 percent of the total computer hardware market in 2001. While the PC market is forecast to experience a slight increase in 2002, other hardware segments are facing mixed results. "In the server market, price competition continues to increase, particularly in the RISC/Unix server market, and this has resulted in lower revenues," said Charles Smulders, vice president of Gartner Dataquest's Computing Platforms Worldwide group. "The handheld market continues to perform below expectations, as enterprises are unwilling to spend experimental dollars on new handheld technologies. Saturation in the printer, copier and PC markets will be an important factor in how these markets perform in 2003 and 2004." While the software industry is expected to return to positive growth in 2002, Gartner Dataquest analysts said the industry will recover at different rates. "In the short term, most demand will be for infrastructure software that can help deliver more value out of existing systems," said Roger Fulton, group vice president and worldwide director for Gartner Dataquest's software program. "Packaged application spending will recover more slowly, as it is dependent on new business initiatives and higher levels of confidence in the business value of IT." The new forecast aggregates the most recently available individual forecasts for the variety of IT products and services that Gartner Dataquest analysts regularly research and forecast. These forecasts consider a wide range of specific factors influencing the buyer and seller sides of individual IT markets, as well as general economic conditions. Virtually all of these individual forecasts have recently been revised to reflect the most up-to-date historical data as well as the latest market conditions. Gartner provided reporters attending Gartner Symposium/ITxpo 2002, the Gartner IT Spending Handbook. This Handbook provides an overview on IT spending trends from various research groups within Gartner to provide a comprehensive view of the market. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with an insightful look at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's annual Symposium/ITxpo events are key components of their annual planning efforts. Attendees are responsible for more than $35 billion in IT spending for their respective companies. For more information about Gartner Symposium/ITxpo 2002, please visit www.gartner.com/symposium or call 1-800-778-1997. Additional information is available in the report "Gartner Dataquest Market Databook, August 2002 Update." This report provides detailed statistics for end-user spending on IT from a global perspective. More detailed analysis is provided in the Spotlight report "Recovery Delayed: 3Q02 IT Market Scenarios Update." This Spotlight provides links to reports on with focused coverage on each of the IT spending segments. These reports are available to purchase on the Gartner Web site at www.gartner.com. Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry. About Gartner |
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Contact: Tom McCall Gartner +1 408 468 8312 tom.mccall@gartner.com |
