Overview – Ralph Finos Consulting estimates that 1H2009 WW IT Spending was -11.4%. Assuming that the July exchange rates are sustained throughout the 2H of 2009, the as-reported 2009 forecast is for a -6.8% decline for 2009 and a modest +3.9% recovery for 2010. We appear to have found the bottom. The revenues of 19 of 35 (54%) of IT vendor business units were short of the forecast estimates and/or the midpoint of vendor guidance (vs. 72% falling short in Q109. Currency has been an important factor (around a -7% impact – depending on the product) for Q1 and most of Q2). However, the comparative strength of the dollar in Q3 & Q42008 will be advantageous for vendors in Q3 & Q42009. As-reported YoY results should have much less of a currency drag than the 1st half and may be a Q4 kicker.
Product Highlights – The as-reported 2009 forecast (adjusted for July currency) for the products:
• The 2009 Hardware forecast is for a -13.5% decline vs. 2008
• Software is doing relatively OK at +1.9%
• Services will be -2.5% vs. 2008
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