Businesses To Spend Less on Technology

As the global recession deepens, businesses will cut their IT investments in 2009.

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Businesses are expected to spend less on technology goods and services this year as a result of the global recession, according to a recent report.

Forrester Research, a Cambridge, Mass.-based independent research firm, released a report predicting that IT spending would drop three percent in 2009, a year after the industry experienced eight percent growth worldwide.

The report expects the biggest decreases to come from companies cutting back on computer equipment like servers and storage devices, as well as services like IT consulting.

"In the past, small to medium-sized businesses have been aggressive technology buyers," said Andrew Bartles, vice president at Forrester and author of the report. But, according to Bartles, small businesses seem hardest hit by the recession, making them more likely to cut back IT spending than other, bigger companies. "They now appear more vulnerable, and their spending could fall below the overall 2009 [projected] average," he said.

Bartles cited the fact that the recession is hitting industries, such as retail, construction and real estate, especially hard.

Forrester projects that 2009 will be the first year since 2002 when international technology spending has decreased. Technology spending decreased by six percent in 2002 when the economy was extremely weakened after the 9/11 terrorist attacks.

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