IT Spending Growth Expected To Slow In '08IT Spending Growth Expected To Slow In '08

Worldwide IT spending will experience slower growth rates next year because of economic uncertainties and risk, according to a report out Thursday by IDC.

The analyst firm is predicting global IT market growth for 2008 at 5.5% to 6%, down from 6.9% this year. The market intelligence group released "IDC Predictions 2008: The Hyper-Disrupted IT Industry Takes Root." It states that 2008 will begin a "post disruption" era in the IT marketplace.

"The IT market has been reshaped by a handful of key disruptions -- online delivery, community-based development, solution-oriented packaging, and emerging markets," IDC explained in a statement issued Thursday. "These disruptions, which started at the margins, gained momentum in 2007 with the rise of everything-as-a-service, Web 2.0 applications, open development communities, "free IT" funding models, and the emergence of non-traditional competitors like Google, YouTube, and Facebook."

IDC believes that market leaders who have cautiously engaged in disruptive new markets, models, and offerings will "jump in with both feet," with investments in emerging markets (such as Brazil, Russia, India and China). They will turn to open business models, expand online product and service offerings, and take new approaches to solutions-oriented packaging, according to the report. In other words, the so-called "disruptive" models, markets, and offerings will become the norm, IDC said.

"Disruptive technologies have been a persistent theme in IDC's predictions over the past several years," Frank Gens, senior VP of Research at IDC, said in a prepared statement. "These technologies have been creeping into everything from enterprise software and hardware to consumer gadgets and telecom services, forcing vendors to rethink their offerings. In 2008, the era of experimentation will end as industry leaders get serious about transforming their products and services to take advantage of -- and meet the challenges posed by -- these new technologies and business models."

Gens added that, as industry leaders rebuild their core businesses on disruptive models and principles, their efforts will "redefine their identity as well as their customer base."

IT companies are expected to focus on high-growth markets like small to medium-sized businesses, while server and application vendors will partner for pre-packaged goods that simplify customer adoption, according to IDC's prognostication.

Other IDC predictions suggest new devices will fill the gap between notebook PCs and smart phones, changing the online marketplace and speeding growth of location-based services. At the same time, mobile network operators will be pushed to open their networks to any device and applications

Software will combine text analytics, sentiment extraction and related technologies to deal with an overflow of unstructured data due to the explosion of social networking, IDC said.

U.S. telecommunications companies will market consumer VoIP more aggressively and corporation will increase their focus on green IT purchases, according to IDC's predictions. Finally, mergers and acquisitions will continue as companies try to expand market share and improve their competitive advantages.