Tech Spending Set to Rebound in 2010

The technology sector is poised for a comeback in 2010, according to a report released Tuesday morning by Forrester Research, an industry analysis group. IT firms will benefit as companies and governments restart their spending on tech infrastructure and software, the firm predicts."The technology downturn of 2008 and 2009 is unofficially over," Andrew Bartels, Forrester Research vice president and principal analyst, said in a statement. "All the pieces are in place for a 2010 tech spending rebound. In the U.S., the tech recovery will be much stronger than the overall economic recovery, with technology spending growing at more than twice the rate of gross domestic product (GDP) this year."

%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Specifically, U.S. IT spending will grow 6.6% in 2010 to $568 billion, after declining by 8.2% in 2009. Global IT spending will perform even better, rising 8.1% in 2010 to $1.6 trillion, after dropping 8.9% last year.

Forrester predicts that hardware and software will "lead the charge," as companies and governments move to upgrade their systems after holding off through the last 18 months, during which the U.S. experienced the worst economic downturn in generations and capital investment took a serious hit. Many companies and municipalities struggled merely to stay afloat -- let alone consider new spending.

'Smart Computing'

That will change in 2010, according to Forrester, which predicts that measured in U.S. dollars, global purchases of computer equipment will rise by 8.2%, communications equipment buying will rise by 7.6%, software spending will rise by 9.7%, purchases of IT consulting and systems integration services will rise by 6.8 percent, and IT outsourcing services will rise by 7.1%.

Bartels said that 2010 marks the beginning of the "next phase of technology advancement," centered around something Forrester Research calls "smart computing."

"New technologies of awareness married to advanced business intelligence analytics make computing smart," explained Bartels. "Smart computing rests on new foundation technologies such as service-oriented architecture, server and storage virtualization, cloud computing, and unified communications."
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