Australia and Asian Tigers at high risk of IT slowdown 2009

Stan Beer
Thursday, 11 December 2008 11:56

IT Industry - Market

A new report has identified Australia, New Zealand and traditional Asian Tiger countries as being at significant risk of an IT spending slowdown in 2009. Meanwhile, the new boom economies of China and India are believed to be relatively safe from the risk of spending cutbacks.

IT spending in Asia Pacific (excluding Japan) will drop to a growth rate of 7.1% in 2009, a decrease from 10.2% in 2008, predicts Singapore-based research group Springboard Research.

According to Springboard’s executive brief “Asia Pacific IT Market Predictions 2009” released today, all countries in the region will be affected, but the degree of fallout from the economic crisis will differ by country.

Countries at highest risk of a slowdown include the most developed economies of the region, such as Australia, New Zealand, Korea, Taiwan, Singapore and Thailand. Less developed, emerging and boom Asian economies, such as Malaysia, Philippines, Indonesia and Vietnam run a lower risk of a spending slowdown.

“Like other regions of the world, Asia will experience an IT spending slowdown during 2009 as all organizations re-look at spending in the wake of the global economic crisis,” said Dane Anderson, CEO and EVP of Research at Springboard Research.

“However, even with slower growth Asia will continue to emerge as a critical region for IT vendors and we will continue to see a substantial shift in investment moving to Asia and other global emerging markets.  While the crisis will affect Asia in 2009, it will also further cement the region as crucial to any global company’s growth strategy moving forward,” Mr. Anderson added.

Risk Index	Countries
Countries at a high risk of a significant IT spending slowdown in 2009	Australia, Hong Kong, Korea, New Zealand, Singapore, Taiwan, Thailand
Countries running a medium risk of a significant IT spending slowdown in 2009	Malaysia, Philippines
Countries running a lower risk of a significant IT spending slowdown in 2009	China, India, Indonesia, Vietnam

According to Springboard Research, the top 10 trends that will shape enterprise IT in the Asia Pacific region in 2009 are (more detail on each is included in the Executive Brief):

#1 Cost Concerns Will Drive a Primary Focus on IT Infrastructure Consolidation

#2 Increased Efficiencies Helps Virtualization Emerge as key to Data Center Transformations

#3 Cost Savings Help Green IT Projects Go Mainstream

#4 Managed Services Emerge as a Bright Spot in a Year of Economic Downturn

#5 Cloud Computing Movement Gains Momentum in Asia

#6 Slowdown presents an Opportunity for Skills Set Upgrade & Acquisition

#7 Unified Communications Gain Steam as Companies Cut Travel Costs, Strive to Improve Communications and Improve Productivity

#8 The Crisis will Lead SMBs to Focus on Outsourcing, Managed Services and SaaS to Transform their Business

#9 Increased Financial Challenges Lead to Tightening of Regulations, Compliance and IT Governance

# 10 Government Spending to Boost the Economy will Benefit IT Companies that Know the Public Sector

“As illustrated in our predictions, we expect that most organizations in the region will be modifying their IT strategy from a focus on supporting revenue generation to an approach aimed at improving efficiencies,” said Ravi Shekhar Pandey, Manager - Syndicated Research at Springboard Research.

“There will be a continued focus on reducing operational expenditure, both from business and IT perspectives. On the positive side, while technology spending will definitely be affected by this crisis, it will be more resilient than other areas that are often easier and quicker to cut,” Mr. Pandey added.

Technology will be more resilient than other areas of spending among enterprises and will be difficult to cut, according to Springboard.