Gartner Upbeat on IT Spending

By Tom Steinert-Threlkeld  |  Posted 2002-10-07 Print this article Print

Online exclusive: The research and consulting firm said that while information technology spending actually fell in 2001, the growth rate could double in 2003.

LAKE BUENA VISTA, Fla.—The growth rate in worldwide spending on information technology will double next year, research and consulting firm Gartner Inc. said Monday morning. Maybe.

"The global economic situation is quite fluid and given the rising uncertainty surrounding the strength of the global economic recovery, there are still significant downside risks to the industry," said George Shiffler, principal analyst for Gartner Dataquest's computing platforms and economics research, in comments accompanying release of its forecast for 2003. The forecast placed 2003 spending at $2.5 trillion, up 7.0 percent from 2002.

That growth rate is more than double the rate Gartner is currently forecasting for this year. As of the start of October, the company is forecasting that 2002 spending will finish at $2.3 trillion, up 3.4 percent from 2001.

Gartner unveiled the findings at its annual Symposium/ITxpo here this week.

Information technology spending actually fell last year, according to Gartner. Crushed by uncertainty following the September 11 attacks on New York and Washington, corporate spending on information technology fell 0.4 percent in 2001, finishing at $2.2 trillion.

The new forecast is partly based on an expectation that the hard-hit telecommunications industry will lead the road to recovery. Corporate spending on telecommunications will increase 7.5 percent to $1.4 trillion, the company said. In 2002, spending on communications increased 4.8 percent, to $1.3 trillion, with spending on wireless systems a large component.

"The telecommunications segment is being driven by the fixed and mobile telecom services market," said Dean Eyers, group vice president and worldwide director for Gartner Dataquest's telecommunications group. "Absent them, total IT spending would actually decline by 0.5 percent."

This latest Gartner forecast shows a slightly sunnier outlook than a survey it conducted with Soundview Technology Group in November 2001, after the attacks. At that time, Gartner said spending on information technology in the United States would grow 1.5 percent in 2002.

That was a big drop, however. Gartner and Soundview, for instance, had forecast 8 percent growth in information technology spending for 2001—before the attacks. And, as reported today, spending actually went down.

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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