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United States Information Technology Report Q4 2009Published by: Business Monitor International Published: Oct. 21, 2009 - 43 Pages Table of Contents
AbstractMarket Overview The US IT market is the largest in the world, and spending on IT products and services is forecast toexceed US$500bn in 2010 and US$600bn by 2013.In BMI’s core forecast scenario, US IT spending growth will be low single digit in 2010 and thenadvance at a compound annual growth rate (CAGR) of 6% over the forecast period. Spending is expectedto remain in marginal positive growth territory in 2009. Key drivers going forward will include:growing fixed and mobile broadband penetration product innovation such as feature-rich netbooks, technology innovation such as GPS technology and services business model innovation such as virtualisation and software-as-a-service (SaaS) and economic recovery. As the recession eases in H209/H110, vendors should see more growth in traditional big-spending ITverticals such as banks and financial organisations, retail and manufacturing. For smaller business,vendors will increasingly need a customised approach based on industry-specific needs. Governmentremains a key end-user, with new government programmes in areas such as healthcare set to generateopportunities. Industry Developments In August 2009 the Federal government reported on its 2009 calendar year IT spending. In full-year 2009, total IT spending including all federal IT investment was measured at US$74.2bn, up1.99% on the previous year’s total of US$72.8bn. Looking forward to 2010, budgeted federal IT spendingis set to rise to US$78.4bn. The Obama administration has rolled out a new feature called ‘IT Dashboard’ to monitor IT projectsacross the federal government. The programme is intended to help provide information to help betterdecision making about IT projects from accountability to personnel and contracting. Competitive Landscape The US PC competitive landscape is dominated by two big domestic vendors, Dell and HP, whichtogether have at least 50% of the US market. The top five leading vendors have above two-thirds of the PC market by volume, with US giant Appleand Asian challengers Acer and Toshiba completing the roster. There were signs in H109 that Apple hadsuffered from its high-end brand image in a recession market focused on value. The launch of Microsoft’s Windows 7 operating system, scheduled for October 22 2009, will be themost significant event for Microsoft since the launch of Windows 95. Microsoft has a lot riding on the new operating system release, given perceived problems with itsprevious operating system Windows Vista. In July 2009 Microsoft posted declines in profits and sales forits fourth 2009 fiscal quarter. Leading IT services vendors such as Accenture and IBM generally saw revenues down between 10-15% in H109 compared with 2008. The fall of US financial giants Lehman Brothers and Merrill Lynch was ominous for Indianoutsourcers who were highly exposed to the US financial services segment. These vendors wererefocusing on opportunities in sectors such as telecoms, healthcare, utilities and manufacturing. Computer Sales The US addressable market for PCs and accessories is estimated by BMI at US$113bn in 2009, withnegative growth compared with 2008. BMI projects that the US computer and accessories market will have a CAGR of 4% over the 2010-2013period. In H109 PC shipments fell between 1-2%, compared with the same period of the previous year. The consumer channel was the main growth area in H109, with consumers continuing to spend onnotebooks, despite the recession. Notebooks are the fastest growing segment and will account for 58% of unit sales in 2009, rising to aprojected 76% by 2013. Netbooks are forecast to account for around 12% of notebook sales in the US thisyear. One driver, both of increased sales and of lower prices, is the move of telecoms operators into thePC retail space. Software The US software market is estimated at US$140.9bn in 2009, with low single-digit growth from2008. Software CAGR for 2009-2013 is projected at around 7%, as the addressable market grows to aroundUS$183.5bn. Spending is expected to continue to grow despite the economic recession. However, theeconomic crisis led some companies to review IT budgets or look to defer systems updates. BMI projects that Windows 7 will provide a boost to the operating system software market in 2010. Drivers of demand for enterprise software include increasing operational efficiency, co-ordinating globalsupply chains and modernising logistics and warehouse functions. More investment can be expected to bein utility software and serviced-oriented architectures rather than traditionally packaged PC software. IT Services The US IT services market is estimated at US$217bn in 2009 with a sharp deceleration in spendingexpected compared with 2006-2008. IT services spending is likely to continue to slow in many sectors throughout 2009 as a result of theeconomic recession. Spending on IT services is quite closely correlated with GDP growth - bad news in arecession. In early 2009 many vendors reported that they were not seeing many major blow-offs on existing deals.The most severely hit area is likely to be softer project-type spending such as consulting and softwaredevelopment. In the near term, budgets have often already been commissioned, and so the effects wouldbe more likely to be felt in the second half of 2009 and in 2010. Get Full Details About This Report >> |
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