IT spending forecasts slashed again

Two major financial analyst firms have released grim new forecasts for IT spending


Two major financial analyst firms have released grim new forecasts for IT spending.

Goldman Sachs and IHS Global Insight have separately released findings that point to a bigger decline in US IT spending this year than previously expected.

Goldman Sachs has revised its global 2009 spending forecast downward from -4% to -9%, citing declining revisions from key indicators such as capital spending, corporate profits and the firm's most recent IT Spending Survey results.

"Our total IT spending index (which includes salaries, services, depreciation, occupancy etc.) came in at 29.5, down from 31.0 in our prior survey in December, implying meaningful contraction," Goldman Sachs' "IT Spending Survey: Downturn takes its toll" report reads.

"The index seems to be groping for a bottom, however, as the rate of decline came in at the slowest pace since last summer."

Goldman Sachs polls 100 managers quarterly with strategic decision-making authority at multinational Fortune 1,000 companies to gauge their level of confidence in the IT market and high-tech vendors.

Eighty percent of those surveyed indicated cost cutting as the highest priority for the coming year, compared with just over 40% indicating the same in mid-2008. The second highest ranking priority was disaster recovery and business continuity planning.

Other priorities include spending on technologies that could potentially deliver "a strong ROI," such as WAN optimisation and application acceleration -- which landed at No.10 among the priorities. And desktop virtualisation moved closer to the top of the list, moving from the mid-20s last year to the 12th priority on decision makers' agendas.

Hardware vendors, Cisco and HP specifically, are also seeing positive growth, despite the economic decline, according to the firm.

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