IDC: attack slows IT spending

In what it calls a "worst-case scenario" projection, International Data Corporation is forecasting dramatically slowed growth in IT spending in the wake of the Sept. 11 terrorist attacks on the United States. IDC analysts expect growth to slow to 3 percent over the next year.

Spending had been slowing in $450 billion IT industry even before the attacks. Although spending on information technology has grown at two to three times the rate of the economy over the past decade, without a decline—even in economic recessions—last year, it slowed 11 percent.

Not all segments will suffer equally, however. IDC analysts expect a larger share of corporate IT budgets to go to investments in backup storage, recovery services, and decentralizing operations. And it seems certain that spending on computer security and encryption software will increase.

IT is also likely to get a bump from the equipment replacement and recovery business in the next few months. According to research firm Computer Economics, recovery and relocation costs after the attacks will easily reach $15.8 billion over three years.

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About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at [email protected].