Australian IT Executives to Learn Cost Containment Strategies At Gartner Symposium/ITxpo In Sydney, 11-14 November 2008
As bullishness turns to caution, Asia Pacific organisations are expected to delay computer hardware upgrades and large technology projects and focus on efforts to improve client retention and acquisition, according to technology research firm Gartner. In a worst case scenario, information technology (IT) spending in Asia Pacific is forecast to grow 8.3 percent in 2009 to reach US$585.7 billion, compared to Gartner’s previous forecast of 11 percent growth.
Worldwide, Gartner research indicates that in a worst case scenario, global IT spending will increase 2.3 percent in 2009, down from an earlier projection of 5.8 percent. Under the worst case scenario, the hardware sector will be hardest hit, followed by the IT services sector. Software spending growth will remain strong at 8.6 percent.
Gartner analysts will provide the latest outlook for the IT industry during Gartner Symposium/ITxpo in Sydney next month, and provide IT professionals with the practical advice to support their 2009 IT planning cycle and help weather the turbulence.
According to Gartner managing vice president Matthew Boon, the second half of 2008 has and will continue to see shifts in confidence and willingness to invest, with chief information officers (CIOs) paying closer attention to investments and requiring higher levels of approval and justification for decisions.
“CIOs in Asia Pacific are being pulled in different directions,” said Mr Boon. “On the one hand they are being asked to grow the business to take advantage of market opportunity, and on the other hand to cut costs.
“This will make the IT buyer less easy to predict. They will seek lower pricing and have lower brand loyalty. Technology vendors will need to be seen to support their customers’ cost containment strategies while at the same time focusing on value.
“In Australia, we are still seeing some IT executives with their head in the sand, refusing to believe the grimmer reality of the next six months. This is the ‘we aren’t seeing it’ trap that wastes valuable planning time. IT leaders in this region should take full advantage of the available time to quietly and privately develop plans for a worst case scenario in 2009,” said Mr. Boon.
According to data from Global Insights, most Asia Pacific nations are still expected to show reasonably healthy GDP growth rates in 2009 compared to other parts of the world – 2.3 percent in Australia, 7.8 percent in India and 8.9 percent in China. While growth in many countries in Asia Pacific is forecast to be down on 2007 levels, in contrast, GDP is expected to grow just 0.1 percent in the U.S. and 0.2 percent in the U.K. in 2009.
According to Gartner, the IT industry will not see the dramatic reductions that were seen during the dot.com bust, because organisations now view IT as a way to transform their businesses and adopt operating models that are much leaner. IT is embedded in all aspects of the business and is a critical part of multi-year transformation projects that are difficult to cut.
Gartner recommends that Asia Pacific IT organisations:
With greater pressure on organisations to make a difference with what they have, Gartner Symposium/ITxpo in Sydney will feature a special ‘virtual track’ called Optimise IT Spending, covering strategies and best practices for containing costs without reducing business value.
Additional advice is available on Gartner’s IT and the Economy’ web site at: http://www.gartner.com/it/themes/economy/economy_100.jsp?prm=10_27_08_CCC
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the IT industry's largest and most-strategic conference, providing business leaders with a look at the future of IT. Gartner's annual Symposium/ITxpo events are an important component of delegates’ annual planning efforts. They rely on Gartner Symposium/ITxpo to gain insight into how their organisations can use IT to address business challenges. For more information, visit www.gartner.com/au/symposium
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 7,900 associates, including more than 1,700 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.