The IT market is set for several quarters of decliningrevenue as a result of the global recession rather than just a sticky end tothe year and the start of 2009.
The warning that the impact of recession is going to be morelong term on the IT sector has been made by Forrester, which has changed itsforecasts based on what has happened in the last couple of weeks.
In the report: What the financial crisis means to the techmarket, analyst Andrew Bartels outlines a tough short-term future for theindustry.
“With the financial crisis now spreading around the world,risks have grown that the USand other major countries will experience a longer and deeper recession than wehad expected. If so, the tech market would see several quarters of declines in purchases,not just two or three quarters with little or no growth in late 2008 and thefirst half of 2009,” his report stated.
The expectation had been of growth rates of around 5% and 6%for this year and next in the UStech sector but those rates are dipping to around.
But on the positive side Bartels said that the interventionfrom global leaders had made an impact.
“While the risk of a protracted global financial meltdown isincreasing, we believe that intervention by the governments and central banksof major economies will keep that from happening,” the report added.
On the vendor side Forrester expects Q4 to be a rough timefor most players with software and IT services areas that will start to suffer.
The report voices the concerns that many are having in the UK with fearsof a recession growing.
But although the channel has reported some delays in ordersand expressed frustration with the slow flow of credit there is still a decentlevel of business being processed.
Ian Kilpatrick, chairman of Wick Hill, said the impact ofrecession depended on where you were geographically.
“We operate in three spheres, the US,UK and Germany. In theUS the tech sector has been sliding into recession for a while and is hurting,in the UK we are expecting problems that have been exported from Americaprovoking the credit crunch and a dive into recession, but in Germany thecountry has come out of recession and business is booming,” he said.
“Here there are going to be winners and losers. Sayingthat everyone is going to get a recession is overstating it,” he add