IDC: Blame 2007's Biggest Trends For IT Spend Slowdown
Page 1 of 1
Just as honeymoons end with new couples facing chores of cooking meals and hauling trash to the curb, global IT will similarly see its afterglow pale as it enters a "post-disruption marketplace" in 2008, according to a new report from research firm IDC.
Citing an uncertain picture, IDC forecasts total global IT spending to grow in the range of 5.5 percent to 6 percent -- down from 6.9 percent this year. U.S. IT spending will drop off even more sharply, with the growth rate falling from 6.6 percent in 2007 to between 3 percent and 4 percent in 2008, IDC projects.
IDC attributes the slowdown to disruptive forces that had for years been baying at the fringes of IT -- everything-as-a-service, Web 2.0 applications and open development communities -- and which burst into the mainstream during 2007.
Through a market adjustment in the year to come, big tech companies will get serious about how to incorporate these changes into their business models, the report said.
"These technologies have been creeping into everything from enterprise software and hardware to consumer gadgets and telecom services, forcing vendors to rethink their offerings," Frank Gens, IDC's senior vice president of research, said in a statement.
"In 2008, the era of experimentation will end as industry leaders get serious about transforming their products and services to take advantage of -- and meet the challenges posed by -- these new technologies and business models," he said. "The status quo is about to change."
The IDC report suggests software companies will focus more heavily on developing markets, redoubling their efforts in the so-called "BRIC" nations (Brazil, Russia, India and China), as well as nine other emerging areas with nascent tech economies.
The "BRIC+9" markets will see the most dramatic growth in the coming year, IDC said.
IDC also expects major IT companies increasingly to adopt online delivery models for storage, servers and other applications as they go after the SMB market. That market represents one of the U.S. market sectors poised for the most substantial growth, the report said.
Following the much-hyped releases of Apple's iPod Touch and Amazon's Kindle e-book reader, IDC also said more companies will develop Web-enabled products that bridge the gap between PCs and smartphones.
Location-based services, such as those that power personal navigation devices, are one area in particular where IDC expects the Internet to be extended via a new breed of more network-capable products.
An early example bearing out this prediction came earlier this week, when Dutch navigation-device maker TomTom announced that its products would be able to link up to a PC to download business addresses from Google Maps.
In response to the challenges posed by open-development mobile initiatives like Google's Androud and the Open Handset Alliance, reluctant network operators will give ground and start letting any device run on their networks, IDC also said.
Additionally, the research firm said new software applications will appear in 2008 promising to organize, aggregate and interpret the oceans of data that are forming within online social communities.
This "Eureka 2.0" software will offer better analytics, "sentiment extraction" and other techniques to identify mass opinion, according to the report.
"One of the more profound consequences that will come out of this era of hyper-disruption is the opportunity -- and for some, the critical need -- for IT suppliers to move beyond their old, narrow identities and offerings," Gens said.