In its end of year report research firmIDC Israel sees the country's Information Technology expenditure falling 1% in 2009 to $5.1 billion, compared with a 2.8% rise in 2008. As recently as May, IDC forecast a 3.5% increase in IT expenditure this year, and 4% growth next year, but all that changed after September. Worldwide, IDC sees just a 2.5% increase next year.
IDC observes that the fall in IT expenditure will be most significantly felt in the employment arena, and estimates that Israel's IT sector workforce will fall by 7%-8%, meaning that some 13,000 out of 170,000 employees will be let go during 2009.
IDC managing director Gideon Lopez claims that despite the current atmosphere, "the situation will remain under control. A lot of markets have only moderate demand anyway following trends that are not connected to economic developments, such as a fall in demand for network servers as a result of virtualization, and the dollar representative rate, and not necessarily due to a fall in expenditure."
IDC's assessment takes into account three segments: developers, where there will be 8,000-10,000 layoffs, service providers where there will be 1,000-2,000 layoffs, and computer departments within large organizations, which will make about 1,000 layoffs. Lopez claims that the coming year will see a large number of information systems managers of organizations reducing their capital expenditure and moving over to cost-saving technologies, such as virtualization or SaaS.
Published by Globes [online], Israel business news - www.globes-online.com - on December 24, 2008
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