One of the most popular reports that we publish at Analyst Views (www.AnalystViews.com) is our IT Spending Predictions Consensus report. Twice a year we review the predictions and forecasts of the leading analyst firms as well as the survey results from leading publications and financial analysts, and we produce consensus predictions based on their input. Although our 2005 IT Spending Consensus Report is not due out until January 2005, several firms have already produced preliminary predictions for the new year. Here's what they're saying:
The general predictions are for an increase in IT spending in 2005, with most firms coming in with a growth rate of 6% to 8% for the year. So far, CIO Magazine's survey of 252 CIOs has produced the highest growth rate of 8.9% for 2005. Forrester Research conducted their own survey of 190 CIOs of North American companies and based on their survey results, they are predicting 7% growth in IT spending in 2005, and they forecast that the growth will continue at a similar pace through 2008. AMR Research also came in with a prediction of 6.6% growth for US-based small-to-medium sized businesses (SMBs).
Forrester Research provided some interesting insight into the "cyclical nature" of IT spending. According to Forrester, "…analysis of business investments in IT over the past six decades reveals that eight- to 10-year periods of significant IT spending growth occur after the introduction of a major new technology. These phases are followed by equal periods in which firms reduce their rate of new investment to focus on ROI and process change that drive business value from the new technology. Forrester estimates that the US is halfway through the current cycle of technology digestion, which started in 2001."
Forrester goes on to break down IT spending to illustrate where they think the growth in IT spending will occur:
- Computer hardware spending will hit its stride at 9%.
- Network equipment will grow modestly at an average of 4%.
- Software spending eventually will recover with 7% growth. In 2005, software spending will grow only 3%.
- IT consulting and integrations spending will post modest growth at 4%.
Other analyst firms offered similar predictions based on particular segments of the IT market:
- INPUT predicts a whopping 40% increase in spending on Homeland Security and Defense Telecommunications by the US Federal Government by 2009.
- Bloor Research predicts a decline in spending on financial and related applications as firms "lock down" their infrastructure to make sure they can meet the various compliance deadlines set by the government.
- Yankee Group believes that investments in applications and technologies that improve the ability of a company to interact with their customers, suppliers and service providers will drive IT spending over the next five years.
Based on these and other early indicators of IT growth, Analyst Views is currently offering a 2005 IT Spending Consensus Report prediction of 6% to 7% growth.
The full-text of the reports referenced above and metadata on hundreds of other IT spending documents is available to subscribers to the Analyst Views service.
End Note: Analyst Views Consensus Reports are created using the "free content" released by the analyst firms. This free content comes from press releases, articles, executive summaries, and abstracts provided by the analyst firms. In addition to the free content in Analyst Views, the site also has the largest searchable index based on the full-text of nearly 50,000 reports. Currently, Analyst Views:
- Has 851 documents published in 2004 that reference "IT spending" or "IT budgets"
- 84 of those documents are "free" documents - you don't need to have an account with the analyst firm to read them
- The free documents come from 19 different analyst firms
- Has free content from over 300 analyst firms and the premium content from over 100 firms including leading firms, mid-size firms, and smaller "boutique" firms.
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