Federal govt shutdown hits U.S. IT spending

Summary:Forrester now sees 2013 IT growth of 3.9 percent, down from 5.7 percent. Thank your clueless Congress.

The Federal government shutdown, budget issues and Congress' inability to get its act together has cut technology spending growth by about 2 percent in 2013, according to Forrester Research.

Forrester now sees 2013 IT growth of 3.9 percent, down from 5.7 percent. For 2014, Forrester projects IT spending for business and government in the U.S. to rise at a 5.3 percent clip.

In a nutshell, any tech vendor who has a heavy federal government component of revenue saw deal flow slow down. The Federal government uncertainty has also filtered into the private sector.

Andrew Bartels, Forrester analyst, said in a blog post:

The effects of reduced Federal spending have flowed into the private sector, purchases of computer equipment have also slumped, as cautious CIOs dial back their spending on these easily deferred categories of the tech budget. Servers and PCs have been especially hard hit as alternatives like infrastructure-as-a-service (instead of buying servers) and tablets (as replacements for laptops) accentuated CIO caution. However, there is evidence that even corporate purchases of tablets have slowed in 2013 as the initial rush to put these new devices into the hands of employees has been way to a more measured adoption curve.

The good news is that business purchases of software will grow at a 6.2 percent clip in 2013, said Bartels. Licensed on-premise software has taken a hit, but mobile applications have gained momentum.

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Topics: Tech Industry, Government


Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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