The global IT market is set for a strong recovery this year on signs of a revival in tech spending in the US and other developed countries after over a year of gloom and doom, a study by Forrester Research has revealed.
"Tech recovery has begun in the US and world markets, as evident from an end to declines in the last quarter of 2009. We expect the IT market in the US to grow by 8.4 per cent and other markets by 7.7 per cent in dollar terms in 2010", Forrester's vice president Andrew Bartels said in a statement, quoting the 'US and global IT market outlook' report.
With the US market accounting for over 60 per cent of the Indian software exports, Indian IT bellwethers such as TCS, Infosys, Wipro, HCL and hundreds of small and medium firms will immensely benefit from a tech revival in North America.
"Purchase of IT goods and services by businesses and the US government is estimated to touch $550 billion and $1.6 trillion in the global market, indicating a robust growth even in the Asia Pacific region, while western and central Europe will witness albeit a slower growth", Bartels pointed out.
The US information and communications technology (ICT) market is projected to be $741 billion, with signs of strong rebound in the telecom sector.
Post-downturn, the innovation cycle is set to resurface and drive technology investment growth, which was interrupted by the global economic recession since second half of 2008 after smart computing technologies fuelled spending in 2007 and early 2008.
Though the Gross Domestic Product (GDP) growth in the US is expected to be nominal, an upturn in tech spending will enable the IT market recover faster than a battered economy.
"In such a scenario, vendors should emphasise how their solutions will help clients to lower costs and then shift to growth messages. With growth prospects still uncertain, Chief Information Officers (CEOs) will be under pressure initially to get funding for IT investments and projects", Bartels noted.
In the second half of this year, the focus will shift to growth strategy from technologies that lower costs and improve IT and business efficiency.
At the same time, IT vendors should ensure their sales and marketing approach address how their products can cut costs and support growth momentum.
The study focused on the US tech industry, with research and data on tech spending across industry and product categories. It also helps vendors predict and quantify growth.
In the US, computer equipment (PCs, peripherals and storage equipment) lead the pack followed by software (operating system software and applications).
"IT services will lag a bit, with systems integration project work waiting for licensed software purchases to rise", the report added.