Economic Slowdown to Lower 2008 Business IT Spending, According to Compass
Intelligence
SCOTTSDALE, Ariz., March 5 /PRNewswire/ -- According to new research from
Compass Intelligence, the current economic slowdown is expected to result in
lower business expenditures on IT products and services. Annual spending
growth on services will decline from 5.3% growth in 2007 to 3.9% growth in
2008. It is anticipated that the economic slowdown will continue through 1H
2008. But this is expected to be a temporary slowdown and by 2009, growth
should increase to 4.8%.
"In the past, there has been a strong parallel between total growth in the
economy and growth in IT spending," says contributing analyst Amy Cravens.
"IT budgets are vulnerable. As corporate spending tightens, IT budgets are
quickly impacted as they can be easily downsized." As the US economy shows
signs of recovery in 2H 2008, which will be partially instigated by the
Economic Stimulus Act signed by President Bush in late February, it is
expected that IT spending will follow suit. However, the impact of the
economic downturn, and the ability to recover, will vary across spending
categories.
"The first half of 2008 may prove to be more difficult for infrastructure
providers, where customers will hold off on non-essential investments until
the 2nd half of this year," says Kneko Burney, President and Chief Strategist
of Compass Intelligence. "Additionally, infrastructure vendors, namely the
high-end systems vendors, can expect an onslaught of competition from managed
services providers. There has never been a time better for managed services
than now," adds Burney.
While it is expected that overall US Business IT spending growth will slow
in 2008, several segments and verticals will continue to experience strong
growth. Compass Intelligence anticipates the following:
-- Outsourcing services is the strongest area of spending growth in 2008.
This is the one spending category that Compass Intelligence
anticipates an increased growth rate for 2008 at 9.8% up from 8.6% in
2008.
-- Mid-sized business will have the greatest spending growth in 2008,
increasing 5.9% over 2007. Small business will also have strong
spending growth at 4.5% this year versus 2007 levels.
-- Services are the fastest growing vertical, increasing 5.1% in 2008,
with total IT spending of $231 billion.
About Compass Intelligence
Compass Intelligence, a global consulting and market analytics firm,
specializes in segment and vertical market intelligence for the high-tech, IT
and telecom industries. Compass Intelligence offers clients a completely new
research experience with a unique and intuitive online intelligence tool,
INSTANT Access. The company provides market intelligence, forecasts,
competitive analysis, market data, insights, and announcement analysis for
multiple markets. Discover the Compass Intelligence difference and visit
http://www.compassintelligence.com.
Company Contacts
Kneko Burney
President & Chief Market Strategist
kneko@compassintelligence.com
Amie Perez
972-287-5522
aperez@compassintelligence.com
SOURCE Compass Intelligence
Kneko Burney, President & Chief Market Strategist,
kneko@compassintelligence.com, or Amie Perez, +1-972-287-5522,
aperez@compassintelligence.com, both of Compass Intelligence
