Nov 24, 2002 (07:11 PM EST)
News Flash: 2002 Stunk

Read the Original Article at InformationWeek

It is the worst of times for IT, say IDC analysts who now dub 2002 the worst year in the history of the industry. The $875 billion IT industry suffered its largest decline ever this year, with a growth rate of negative 2.3%, the analysts say.

The industry shrank about 3% in the past two years, compared with an average annual growth rate of 12% for the past 20 years, IDC says. But it predicts the growth rate next year to be 5.8%.

Significant changes in the economic or geopolitical environment, such as prolonged war in Iraq or a stock market plunge, could result in lower growth rates for IT spending, leading IDC to produce an alternate, more pessimistic forecast of 2% growth in IT spending next year, the analysts say.

Under more favorable assumptions, IT spending in the United States would grow 4.4% next year, led by renewed demand for servers, security, and network equipment, IDC says.

The worldwide systems market, including PCs, servers, and workstations, declined 9.3% this year, the analysts say. Storage shrank by 10.6% and is not expected to recover to its 2001 size until after 2006. The network equipment market experienced a 7.6% decline, driven by sales to telecom service providers.