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Summary:

Forrester issued an optimistic report today forecasting a 6.6 percent rise in U.S. tech spending in 2010. The beneficiaries of the hoped-for rise in fortunes will be server makers, followed by communications vendors and software providers.

Forrester issued an optimistic report today claiming that the economic downturn of the last year and half is over, and forecasting that tech spending in the U.S. will grow by 6.6 percent in 2010 (though not as fast as the firm originally forecast back in September.) Now that growth rates have stopped falling, the beneficiaries of the hoped-for rise in fortunes will first be the server makers, followed by communications vendors and software providers.

The recovery will be a function of spending on the part of companies that need to upgrade their equipment for the first time in some 18 months, a lessening of the overall economic gloom, easier credit thanks to a more stable financial market and a new wave of technology arising out of the addition of connectivity to everything. From the report:

With these four factors looking positive, we expect that the 2010 tech recovery will be much stronger than the economic recovery. Measuring nominal GDP and tech investment on a year-over-year basis (as vendors measure their revenue growth), we forecast that in 2010 US business investment in technology goods will grow by 6.6% in Q1, 6.3% in Q2, 9.6% in Q3, and 8.6% in Q4 — more than twice as large as the nominal GDP growth rates of 2.6%, 3.4%, 3.4%, and 3% for the same quarters (see Figure 8). That will be a recurrence of the pattern of growth from Q4 2007 to Q2 2008, when tech investment also grew at almost twice the rate of growth in nominal GDP. The tech boom that started in late 2007 and early 2008 will be back on track.

Let’s hope we’re not entering another bubble, perhaps one tied to adding connectivity to everything. Already we have more e-readers than the market can handle. Add to this an influx of iPhone clones,  3-D television (GigaOM Pro, subscription required), smart grid funding, tablet frenzy and the potential for huge increases in connectivity costs that might derail such innovations before most people ever get to try them, and I’m sure that amid the good news there will still be some bad.

Thumbnail image courtesy of Flickr user Lepiaf.geo

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By Stacey Higginbotham

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  1. [...] various divisions, Data Center Group revenue was up 21 percent year-over-year (there have been predictions that better times lie ahead for companies selling high-margin servers and producing chips for them), and average selling price [...]

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