For Tech Sector Economics Professionals

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	May 4, 2005 Exchange Rates Mask Slowing Global Tech Growth An Analysis Of 35 Global IT Vendors by Andrew Bartels with Tom Pohlmann, Andrew Parker, Manuel Ángel Méndez, G. Oliver Young, Olivia Ester

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Executive Summary

How is the global tech sector doing? It largely depends on what currency is being used for measurement. As an interim step toward developing its own global IT forecast, Forrester measured the global revenues of 35 large IT vendors in US dollars. We found that the Asia Pacific market is the strongest for vendors, with revenues calculated in a mix of US dollars and Japanese yen likely to grow by 7% in 2005. The Americas is the next strongest market for IT vendors, with a prospect of 6% growth in US dollars for 2005. Vendor revenues in euros for Europe, the Middle East, and Africa (EMEA) are the weakest, with 4% growth for both 2004 and 2005. Thus, exchange rate changes that have favored US IT manufacturers are masking a slow growth period for IT globally. Computer hardware revenues are strongest, especially in Europe; software, IT services, and IT outsourcing revenues are more even by region but are growing moderately; and communications equipment spending is weak in the US but stronger in Europe and Asia.

TABLE OF CONTENTS

• The Pros And Cons Of IT Vendor Revenue Data
• Global Outlook For IT Vendors: 2004 Versus 2005
• Which Regions Buy Which Technologies?

WHAT IT MEANS

• IT Vendors Need To Play Exchange Rate Arbitrage
• The Tech Digestion Phase Is A Global Phenomenon
• Supplemental Material
• Related Research Documents

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