Wall Street Beat: IT Forecasts Slashed

Wall Street Beat: IT Forecasts Slashed

With CIOs reporting budget revisions, market analysts slashing expectations for tech sector growth, and companies as diverse as Yahoo, Hynix, TexasInstruments and Sony cutting sales forecasts and jobs this week, there is no bottom clearly in sight for IT services.

Along with a global slowdown, the U.S. recession is having an effect on technology that is much more profound than what was expected several months ago.



With forecasts for a positive outcome for next year getting razor-thin, even bright spots like software are dimming. Gartner forecasts that worldwide spending on enterprise software will reach US$244 billion in 2009, down from its prediction of $253 billion made in September, before the collapse of the U.S. investment banking industry.



The hardware and components sectors of IT support are getting hit the hardest, as PC purchases are typically the first thing cut when tech budgets are constrained. Several large chip manufacturers cut their forecasts this week.

If the macro economy gets much worse, hopes for even a weak IT recovery in 2009 will fade.