IT Spending May Surprise Forecasters

International Data Corp. has downgraded its 2003 forecast for worldwide IT spending growth. Even assuming a short war in Iraq, continued economic and geopolitical unrest will mean IT spending growth of just 2.3 percent this year, according to IDC, not the 3.7 percent previously forecast.

IDC may be overthinking the situation. Companies have been hoarding cash for some time as a hedge against global events. Expect a flood of money to enter the IT market within three months of the end of the war, most of it for upgrades. We would agree with IDC that significant expenditures on new projects (especially large-scale deployments) will only trickle in--each new project will have to be restarted at various levels, some of them rebooted entirely, while others simply cleared to go--but also expect significant spending on printers, workstations, software and other IT assets that don't fit into the "new project" category. And expect these "maintenance" expenses to be funded without delay.

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