IDC: 2002 Worst Year in History of IT
- By Scott Bekker
- November 26, 2002
The IT industry is having its worst year ever in 2002, market researchers at IDC concluded.
Looking at the first 10 months of 2002, IDC researchers found the worldwide IT industry had its largest decline -- a growth rate of negative 2.3 percent -- in 2002. That compares with annual average growth rates of 12 percent over the past 20 years.
"Overall, the IT industry has contracted by roughly 3 percent over the past two years," IDC chief research officer John Gantz said in a statement.
IT industry sectors hit hardest included storage, systems, network equipment and services. The worldwide storage market shrank by 10.6 percent in 2002. IDC doesn't expect the storage sector to regain its 2001 size until after 2006. The worldwide systems market, consisting of PCs, servers and workstations saw a 9.3 percent reduction. Driven by a drop in sales to telcom providers, the network equipment market fell 7.6 percent. The services market hit a three-year low in the value of an average contract.
IDC sees a better future for the $875 billion IT industry, but even there the market research firm is hedging its bets.
"Looking forward to 2003, we expect to see spending on IT and communications resume, driving a worldwide growth rate of 5.8 percent for the industry," Gantz said. That forecast includes improving growth rates for several years and slower growth later in the decade.
But for the first time, IDC is also providing a "downside" forecast that accounts for such possibilities as a prolonged war in Iraq or a new plunge in the stock market. Those scenarios call for IT spending growth in 2003 to be closer to 2 percent with spending in future years following real Gross Domestic Product growth.
Scott Bekker is editor in chief of Redmond Channel Partner magazine.