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Wednesday 22 September 2010

TechMarketView forecasts five years of decline in the UK SITS market

PT Five yearsPerhaps the most explosive announcement at my Earthquake speech last night was a pre announcement of the revised forecasts for the UK Software and IT Services market we will publish in October. TechMarketView’s Public Sector team have undertaken an extensive review of the cutbacks in SITS spend likely to come out of the spending review.  We are now forecasting that, rather than the three years of decline (in real terms) between 2008 -2010 as in our current forecasts, that run of declines will now extend to 2012. Indeed the forecast return to growth in 2013 is so meagre that even that must be in doubt. That means we will have had at least five years decline (in real terms) in the UK SITS market.

We are now estimating that over 10% of annual SITS spend will be taken from the public sector between 2009 and 2012 with central government SITS spend down by nearly 30%.

This is the largest and most severe reduction in our UK SITS forecasts in my 25 years as an analyst. The resulting downturn will be the longest and most severe in the 50 year history of IT. In 2002 I forecast that UK SITS was now deflationary - we would do far more IT but spend far less doing it. I believe this is now an established trend for at least the next decade too - and probably forever.

We will be publishing detailed forecasts, as usual, for our Foundation Service clients in the coming weeks as our revised forecasts are finalised.

Posted by Richard Holway at '06:01'

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