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April 10, 2007 US IT Spending Update: Q1 2007Q4 2006 Data Suggests Tech Slowdown Already Happenedwith Ellen Daley, Heidi Shey |
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Executive Summary
Did the feared slowdown in the US economy and the US tech sector actually hit in the second half of 2006? While the data is conflicting, we believe that is the case. True, US GDP data for Q4 2006 continued to show moderate 6% growth in tech investment. However, there was clear evidence of a slowdown in the US economy to 2.5% growth in real terms, and the Q4 2006 data for US revenues of 40 large IT vendors showed a dramatic slowdown in growth. We believe that the vendor data is giving a more accurate measure of tech purchases. The result? It now looks like our projected tech slowdown actually happened in late 2006 and will carry into the first quarter of 2007. Therefore, the outlook for the rest of 2007 is one of moderate improvement. Storage hardware and software, infrastructure management software, application servers and business process management (BPM) software, and applications will be the hottest areas of purchase. Servers, communication equipment, operating systems, application development software, and IT consulting services will lag the most.
TABLE OF CONTENTS
- The Tech Slowdown We Expected In 2007 Actually Hit In Q3 And Q4 2006
- Forecast For US IT Investment: 4% In 2007, After 6% In 2006
- Forecast For US IT Spending: 5% To 6% In 2007 To 2008
- Digging Deeper: What's Hot And What's Not In IT Goods Categories
RECOMMENDATIONS
- Stay Cautious, But Prepare For Somewhat Better Times
WHAT IT MEANS
- The Tech Sector Will Avoid A Slowdown In 2007
ALTERNATIVE VIEW
- 2007 IT Spending Will Be Lower Because The Economy Weakens
- Supplemental Material
- Related Research Documents
Features
US Government Data Shows 6% Growth In IT Goods Business Investment
Vendor Data Shows Decline In US Purchases, Especially For Computers
Look For Downward Revisions In Government Data In July 2007
Maybe The Expected Economic Slowdown Has Already Happened
Slowing Growth For Both US Business IT Investment And IT Vendor Revenues
Forecast: Quarterly US Business IT Investment Growth Rates Vs. Annual Rates
Forecast: US IT Spending, 2007 To 2008
US Software Spending Growth Remains Steady And Strong In 2007
US Computer Hardware Purchases Will Revive A Bit In 2007 And 2008
Telco Purchases Of Communications Equipment Will Drop In 2007
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