October 11, 2005

Expect A Tech Slowdown Before The Next Boom

Forrester's Long-Term IT Spending Forecast For The US, 2005-2010

by Andrew Bartels

with Tom Pohlmann, G. Oliver Young, Katherine Brown

Executive Summary (This is a document excerpt)

The end of the current period of tech digestion is just two to three years away. A new period of business innovation will start in 2008, based on a new generation of technology and driving another tech boom of rapidly rising IT spending. But first the tech digestion period will go out with a bust rather than a whimper. After two years of moderate 7% spending growth, the US tech sector will go through a slowdown in 2007. That slowdown, which will last into 2008, will set the stage for a revival in 2009 and 2010 as companies will have absorbed the previous boom's Internet technologies and will be poised to ingest newer ones. US IT spending, which will grow at a 5% CAGR from 2004 to 2008, will jump to a 9% CAGR from 2008 to 2010.

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