IDC lowers European IT services forecast for 2009

IDC has lowered its European IT services forecast for 2009 by 2 percentage points, from 2.6 per cent to 0.6 per cent.

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Analyst group IDC has lowered its European IT services forecast for 2009 by 2 percentage points, from 2.6 per cent to 0.6 per cent.

Looking beyond 2009, IDC anticipates a slow recovery to start only in the second half of 2010, with sluggish 2.2 per cent growth.

IDC expects a freeze in non-discretionary spending by IT organsations in Europe.

"Many projects will be delayed, reduced in scope, or chopped into smaller pieces, but so far we do not expect many projects to be cancelled,' said Laura Converso, research manager, IDC European Software and Services.

"Despite the delay in IT decisions, we believe projects aimed at risk management, M&A integration, and further cost efficiencies are more likely to be approved. The outlook for manpower-based IT services is tough for the year ahead, with an expected strong reduction in both volume and billing rates."

"Although we expect pricing pressure to be high in outsourcing as well, we believe this spending stream is less cyclical than systems integration and consulting, and we anticipate 4.4 per cent growth in this segment."

IDC suggests cost cutting in 2009 will lead to companies outsourcing while hardware shipments, software license rates and IT training are all likely to see significant drops in demand.

Despite sharp declines in projects and support during 2009, IDC expect more crisis-resilient sectors such as outsourcing to sustain IT services market growth at 0.6 per cent.

In addition, IDC sees a post-crisis outlook in which SaaS offerings, cloud platforms, and global sourcing models emerge as the big winners.

(IDC is a subsidiary of IDG, Macworld's parent company.)

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