The IT Analysts Make Their 2007 Predictions
As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.
Jan 10, 2007
Human beings are forward-looking animals, which is probably why we have our eyes in the front of our heads. (Well, actually, we have our eyes in the front of our heads so we can see in 3-D, and the effect is that we are turned into forward-looking creatures.) As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.
The analysts at Forrester Research were the early birds for IT spending forecasts for 2007, putting their forecast in a comparison and contrast between IT spending in the United States, Canada, and Europe in a report that came out in early December.
According to Forrester's analysis, the increase in IT spending in 2006 was somewhat mixed, and the prospects for growth are better in 2007 compared with the United States and Canada. While the countries of Western and Central Europe have more collective gross domestic product than the United States - GDP is a measure of the value of all goods and services sold in an economy - IT spending among companies in Europe will hit $565 billion in 2006, considerably smaller than the $721 billion that companies in the United States will spend this year on IT. If you are rooting for the European market, the 5.1 percent growth in IT spending in Europe almost matched the 5.8 percent growth that Forrester is projecting for 2006 in the United States. Forrester is expecting a slowdown in IT spending in both geographies in 2007, with the European market cooling a little to $586 billion in sales, up 3.7 percent, compared to $742 billion in the United States, up only 2.9 percent.
"While U.S. IT spending has been growing faster than European IT spending in recent years, European IT spending growth is now poised to exceed that in the U.S.," explains Andrew Bartels, a vice president at Forrester who is responsible for Forrester's North American IT spending forecasts. "With European economic growth showing signs of improvement while the U.S. economy is likely to slow down, 2007 will be the year when European IT spending grows more rapidly than that in the U.S. or Canada."
Forrester's analysts say that the bigger European and multinational companies that are headquartered in Europe are just as sophisticated as their American counterparts when it comes to IT spending, but that small and midrange companies as well as state and local governments in Europe tend to lag their counterparts in America when it comes to IT investments.
On a country by country basis, Forrester is predicting that the businesses and governments in the United Kingdom will spend 61 billion euros (about $77 billion) on IT in 2006, followed by Germany with 57 billion euros ($72 billion) in spending. IT spending in France is about two-third of that in the U.K, and Italy is about two-thirds of that in Germany, according to Forrester (which is $51.5 billion and $48 billion, respectively). Spain, the Netherlands, and Switzerland are expected to spend between 15 billion euros and 20 billion euros in 2006, with the remaining countries in Western Europe spending between 5 billion to 10 billion euros each. (That's Belgium, Sweden, Denmark, Austria, Poland, Finland, and Norway in this category, and that is $6.3 billion to $13 billion in U.S. dollars.) All of the other countries in the region are expected to spend less than 5 billion euros. So while Russia, Ukraine, and other Eastern European countries have very high growth in IT spending, the numbers are still pretty small.
If you want a second opinion on IT growth, the prognosis will be much the same over at Gartner, at least among large enterprises in the United States. Gartner released a statement late last week that said the company's analysts have found after checks that big companies are expecting to only increasing their IT spending in 2007 by 2.8 percent. Only six months ago, these same executives were forecasting that their 2007 spending would rise by 6 percent. What gives?
"A number of factors hav
The analysts at Forrester Research were the early birds for IT spending forecasts for 2007, putting their forecast in a comparison and contrast between IT spending in the United States, Canada, and Europe in a report that came out in early December.
According to Forrester's analysis, the increase in IT spending in 2006 was somewhat mixed, and the prospects for growth are better in 2007 compared with the United States and Canada. While the countries of Western and Central Europe have more collective gross domestic product than the United States - GDP is a measure of the value of all goods and services sold in an economy - IT spending among companies in Europe will hit $565 billion in 2006, considerably smaller than the $721 billion that companies in the United States will spend this year on IT. If you are rooting for the European market, the 5.1 percent growth in IT spending in Europe almost matched the 5.8 percent growth that Forrester is projecting for 2006 in the United States. Forrester is expecting a slowdown in IT spending in both geographies in 2007, with the European market cooling a little to $586 billion in sales, up 3.7 percent, compared to $742 billion in the United States, up only 2.9 percent.
"While U.S. IT spending has been growing faster than European IT spending in recent years, European IT spending growth is now poised to exceed that in the U.S.," explains Andrew Bartels, a vice president at Forrester who is responsible for Forrester's North American IT spending forecasts. "With European economic growth showing signs of improvement while the U.S. economy is likely to slow down, 2007 will be the year when European IT spending grows more rapidly than that in the U.S. or Canada."
Forrester's analysts say that the bigger European and multinational companies that are headquartered in Europe are just as sophisticated as their American counterparts when it comes to IT spending, but that small and midrange companies as well as state and local governments in Europe tend to lag their counterparts in America when it comes to IT investments.
On a country by country basis, Forrester is predicting that the businesses and governments in the United Kingdom will spend 61 billion euros (about $77 billion) on IT in 2006, followed by Germany with 57 billion euros ($72 billion) in spending. IT spending in France is about two-third of that in the U.K, and Italy is about two-thirds of that in Germany, according to Forrester (which is $51.5 billion and $48 billion, respectively). Spain, the Netherlands, and Switzerland are expected to spend between 15 billion euros and 20 billion euros in 2006, with the remaining countries in Western Europe spending between 5 billion to 10 billion euros each. (That's Belgium, Sweden, Denmark, Austria, Poland, Finland, and Norway in this category, and that is $6.3 billion to $13 billion in U.S. dollars.) All of the other countries in the region are expected to spend less than 5 billion euros. So while Russia, Ukraine, and other Eastern European countries have very high growth in IT spending, the numbers are still pretty small.
If you want a second opinion on IT growth, the prognosis will be much the same over at Gartner, at least among large enterprises in the United States. Gartner released a statement late last week that said the company's analysts have found after checks that big companies are expecting to only increasing their IT spending in 2007 by 2.8 percent. Only six months ago, these same executives were forecasting that their 2007 spending would rise by 6 percent. What gives?
"A number of factors hav