Cautious buyers cast doubt on IT spend

Gordon Peters
Friday, 09 April 2010 02:08

IT Industry - Market

With buyer intentions in some doubt, IDC has suggested that global IT spending might be flat or even down over the next 12-months, although it says that eventually, spending in the post-economic downturn phase, will have to pick up again, as projects and updates that were put on hold during the downturn become more critical to competitiveness in the recovery.

In its latest report, IDC says its buyer intent metric dropped below zero for the first time since last October. Meanwhile, according to IDC the market indicators metric enjoyed another 'mall but steady gain over the previous month.'

According to IDC's chief research officer, John Gantz, "although the economy isn't exactly leaping forward, there are plenty of positive signs driving the market index - the forecasts for GDP growth and corporate profits are good, unemployment seems to be easing, and the stock markets are making steady gains.

However, Gantz warns that IT buyers remain cautious. 'After a slow climb back into positive territory, we've now had five months of fluctuating results from our IT buyers. Eventually that spending will have to pick up again, as projects and updates that were put on hold during the downturn become more critical to competitiveness in the recovery."

IDC says its buyer intent metric for April was 994, which was down considerably from the March score of 1026. Gantz says that both the line of business executives and the CIOs surveyed by IDC lowered their outlook, with line of business executives taking a particularly pessimistic stance. 'Buyer Intent reflects market demand for IT products and services over the next 12 months.'

The IDC market indicators metric for April was 1081, up slightly from 1074 in March, and according to IDC the macroeconomic indicator continues to suggest a healthy recovery, buoyed by improving GDP and profit forecasts for the U.S., while the revenue indicator remained steady this month.

Gantz says the market indicator metric combines input from economic and IT industry revenue forecasts to provide a snapshot of broader economic conditions. "The economy and the IT industry are looking up, but buyers are lagging the market indicators, and have been for months. Perhaps that's the way it should be - caution at the crossroads."