Mixed Signals on IT Spending

As we can guess from first quarter results from service providers and vendors (two previous Telcoflash issues), there were no strong reasons for euphoria in the telecom market. IDC is just releasing its quarterly analysis on worldwide IT spending, and the conclusion is not really different.

In Europe, worsening economic conditions could limit IT spending growth to only 4% this year, while in the US, IT spending could increase by 5% and in Japan spending could be up only by 1%. More generally, expectations for 2Q05 and the full year are broadly on the downside, and are dependent on revived protectionist pressures, oil prices fluctuations, increase in interest rates and further currency adjustments.

Just as a flavor, IDC forecasts a worldwide IT market growing at a CAGR of 6% over 2005-2009 period, while the telecom market should grow at a CAGR of 10% over 2004-2009 time frame.