IDC: Local spending to ride out US recession

IDC: Local spending to ride out US recession

Australian IT spending will remain robust while the looming US recession slashes levels elsewhere, according to IDC analysts.

Speaking about the post-disruptive marketplace at the research firm's annual Directions event in Sydney, executive vice-president of international business units, Phillipe de Marcillac, claimed hardware sales would be hardest hit, followed by software and then the more resilient services sector.

"We see some slowdown and mild tapering off due to the US recession, but Australia is still relatively strong," he said. "We think that there will be a moderate effect on the Australian market, but there will be an effect."

IDC predicts spending growth to slow by $US5 billion in Asia-Pacific/Japan in 2008. IT spending worldwide in 2007 hit $US1.3 trillion while in Asia-Pacific it reached $US266 billion.

While CEOs rank IT in IDC's top five concerns for 2008, CIO sentiment and buying intent are heading south.

"CIOs are becoming more bearish," de Marcillac said.

IDC also noted that in mature markets the SMB sector outperformed large enterprise in terms of IT spending growth.

While emerging economies were less impressive, de Marcillac claimed their SMB markets represented an attractive opportunity, particularly for experienced Australian players, in the longer term. He also noted the channel must improve its delivery of IT solutions to SMB clients to evolve beyond the scaling down of large enterprise solutions.

Presenting to an industry crowd of 100 attendees, the Hong Kong-based de Marcillac also highlighted Web 2.0 tools as a disruptive technology trend. "Corporations are using Web 2.0 to change the rules in the way we do business," he said. "Customers are doing this as well."

But while Web 2.0 tools promise obvious benefits there are downsides, de Marcillac said. Companies needed to actively engage their online reputation, as younger generations use the Internet as a primary source of information and participate in lively discussions.

"The whole idea of you tell two people when you like something and 10 when you don't is very relevant here," he said.

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