IT spending will bounce back next year, according to analyst organisation IDC.
Speaking at its European IT Forum in Monaco, IDC's chief research officer, John Gantz, said: "The rebound of the IT market is coming."
Despite the tough current market conditions, the analyst said, the bottom has been left behind and there will be a modest upturn in growth over the rest of 2002.
Next year would see "a return to normal growth patterns, but not aggressive growth," Gantz said. IDC's worst-case scenario predicts at least four per cent growth in European IT spending in 2003.
Gantz said the slowdown in IT spending was part of the industry's usual business cycle, where new technology creates "a new paradigm", creating a speculative bubble, followed by a slump in the market.
But, he said, following the slowdown, long-term exploitation of new technology would begin "with lots of technology and business innovations and changing market share".
The new market will see architectural changes in everything from servers and storage to telecom infrastructures, IT services, software and e-business, Gantz addded.
He warned that vendors should stay close to customers and that "the first to gain mind share in the new era gains market share".
Technology users should form partnerships with systems integrators and cut costs by outsourcing all but non-strategic areas of IT, according to IDC. Outsourcing models would evolve to focus on managed services and utility computing models.
The internet, business integration, mobile, security and globalisation will be driving forces of the rebound. "Mobile and wireless is set to be the driving force on the computing landscape for the next decade," said Gantz. Wireless local area networking equipment sales will grow by 22 per cent a year until 2006.
There will be 20 million European broadband home users by the end of next year, according to IDC, and "transaction-intense" websites will grow five-fold in the next four years to 10 million by 2006.
But Gantz warned that investments in security are being outpaced by the value of transactions they are protecting.
No longer a "minor tactical function", security had to become a "major strategic investment", he said.
Although there had been a 1,000 per cent growth worldwide since 1999, security spending had yet to double on 1999 levels and needed to enjoy a higher profile, Gantz said.
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