IDC Sees Tech Spending Slowing in 2008

As part of its annual predictions for the upcoming year, market researcher IDC reported that growth in global technology spending is expected to slow down in 2008 as IT shops cut back on purchasing, particularly hardware.

According to the report, technology spending growth worldwide will range between 5.5 and 6 percent in 2008, down from 2007's 7 percent growth. U.S. spending growth will also fall, going from 6.6 percent this year to 4 percent next year.

Consequently, many hardware and software vendors will be pursuing emerging markets along with small and medium businesses (SMBs) in an attempt to compensate for the slower spending growth in the U.S. Some of the larger vendors will also become more aggressive in their acquisitions strategies in the more promising sectors, IDC predicted.

Some of the emerging markets where IDC sees the most potential include the BRIC countries (Brazil, Russia, India and China), along with nine other countries including Poland and Mexico where they growth is expected to average around 16 percent.

Peering into the future in other areas, IDC said Google could further bolster its position as the leader in Web-based search in the SMB markets by acquiring either Salesforce.com or Intuit, or both.

"Google wants a beachhead into the small, medium-sized business market," said Frank Gens, IDC's senior vice president of research, who said he expects SMBs to increase spending by 8 to 10 percent in 2008.

Posted by Ed Scannell on December 06, 2007 at 11:57 AM


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