After a tough 2009, the global technology industry will recover drastically as global spending on IT hardware and software is bound to bounce back strongly in 2010, says a study.
According to the technology research firm Forrester, "downturn" of 2008 and 2009 is "unofficially over" and the worldwide spending will jump 8.1 per cent to more than $1.6 trillion, following a decline of 8.9 per cent last year.
The strongest growth is expected to be in Europe with a spending rise of 11.2 per cent. Countries in western and central Europe will receive an additional boost from the dollar's decline against the euro.
However, if measurements are made in local currency, the US is forecast to see the strongest tech growth, with an expected 6.6 per cent increase to $568 billion after a decline of 8.2 per cent last year.
Forrester analyst Andrew Bartels says the tech recovery will outstrip the overall economic recovery of the US, with technology spending growing at over twice the rate of GDP.
"All the pieces are in place for a 2010 tech spending rebound. In the US, the tech recovery will be much stronger than the overall economic recovery, with technology spending growing at more than twice the rate of gross domestic product this year," Bartels said.
Forrester predicts the best-performing industry areas will be software and computer hardware, with a 9.7 per cent and 8.2 per cent increase respectively. It is hoped upcoming quarterly earnings reports will back up Forrester's positive predictions. Chip giant Intel will be one of the first to release its reports later this week.
Bartels also believes 2010 could be the start of a longer growth cycle for technologies such as cloud computing and unified communications.
Software will enjoy the greatest uptick in sales, according to Forrester, which sees worldwide spending on software growing by 9.7 per cent. Some of that could be driven by key new products from Microsoft and other vendors. Microsoft launched Windows 7 in October of 2009, and is slated to ship Office 2010 in the middle of this year.
Forrester also sees a strong rebound in the hardware sector in 2010, with spending on computer equipment expected to increase 8.2 per cent. Communications equipment sales will grow 7.6 per cent, sales of IT outsourcing services will climb 7.1 per cent, and sales of consulting and integration services will increase 6.8 per cent, Forrester said.
Forrester believes the IT industry is on the verge of a six-to seven-year cycle of growth and innovation that will be driven by "smart computing", which represents a marriage of advanced hardware and software technologies that can drive new levels of automation and efficiency.
