Date:01/07/2009 URL: http://www.thehindubusinessline.com/2009/07/01/stories/2009070151630400.htm

Back Recovery to be rapid, strong: Forrester

Our Bureau

Bangalore, June 30 Though the global IT market is expected to fall by 11 per cent and the US market by 5 per cent this year, the steep decline has set the stage for a rapid and strong recovery in late 2009 and 2010, Forrester Research said.

“We think business and governments reacted to the US and global recessions by cutting back too much on investment in Q4 2008, Q1 2009 and Q2 2009,” said Mr Andrew Bartels, analyst, Forrester. “They will restore tech purchasing levels as they realise that the recession is not as deep or as long lasting as they feared.”

US outsourcing is expected to grow by a mere 2 per cent this year, hurt by the economic uncertainty and pricing pressures.

The spending would grow 6.5 per cent in the second half of 2009 and in 2010 as deals get implemented, Forrester said.

2010 outlook positive

Software purchases in US are expected to slide 3 per cent, with licence revenues down much more, which would increase to 7.5 per cent in 2010. IT consulting and systems integration services would decline 2 per cent in 2009. The outlook for 2010 is positive with a 7.9 per cent growth.

US business and government purchases of computer equipment in 2009 will be 9.8 per cent lower than that in 2008. Next year, the growth in the sector is expected to be 11.7 per cent higher from the depressed 2009 levels.

Purchases of network equipment would drop 10.9 this year. In 2010, it would register a growth of 6.8 per cent.