The UK's largest technology and IT services companies
are likely to be those worst affected byfalling spending on ITby corporates,
according to research firm TechMarketView.
The firm found that revenues for UK software and IT services
sector to fell to -1% in 2008, compared with 3% growth over the
previous four years.
TechMarketView predicts the UK’s IT revenues to fall to -2% in
2009, a decline of £7.4bn, and to show growth only by 2011.
Global purchases of IT goods and services is
expected to decline by 3% in 2009, according to Forrester
Research.
The demand for new software licences and related IT project
services has dropped as big businesses cut non-essential IT
spending in the economic downturn.
According to TechMarketView co-founder Richard Holway, the
“make-do-and-mend” mindset is likely to affect leading IT companies
the most as they are forced to cut licensing costs.
The firm estimates that 80% to 90% of IT budgets are devoted to
maintenance and minor upgrades of systems installed in the past
four years.
Only companies that depend more on outsourcing or public sector
spending, have seen the UK as a growth market in the past year.
Holway expects smaller, leaner companies providing services that
cut costs to emerge as winners from the economic downturn.
He predicts that larger companies, such as Dell and Microsoft,
will attempt to offset falling revenues through higher-margin
revenues from IT services, such as consulting.