Analyst: Slowdown in global IT spending continues

A record number of companies will cut their IT budgets or keep spending flat next year, according to market analyst Datamonitor

Global growth in IT spending will slow for the fourth year in a row as the credit crunch compounds the problems of the already stagnant market.

A record number of companies — slightly more than 60 percent — will cut their IT budgets or keep spending flat next year, according to market analyst Datamonitor.

The lifelessness of the market has been exacerbated by a sharp fall in businesses planning to significantly increase their IT budget, down from 21 percent in 2006 to nine percent in 2009.

Daniel Okubo, a technology analyst with Datamonitor, said in a statement: "For the past couple of years enterprises have been cutting back IT budget increases as they adopt a more cautious viewpoint of the global economy."

"More recently, the financial services market, as seen by the recent collapse of Lehman Brothers, is suffering from a crisis in confidence, caused by a spate of write-downs and concerns over liquidity," said Okubo.

The findings echo concerns raised by Charles Ward, chief operating officer of IT trade association Intellect, that companies will put their hardware refreshes on hold in response to the credit crunch, and warnings from computer manufacturer Dell that demand is weakening.

The only industry to buck the flat IT market is healthcare, where 57 percent of companies said they plan to expand spending.

Datamonitor attributed this to governments investing in new technologies to ease the strain placed on healthcare by the aging baby-boomer generation.