IDC Reports Long-Awaited Turnaround in IT and Telecom Spending

FRAMINGHAM, MA – NOVEMBER 3, 2003 – After two years of record declines and recession, the IT and telecom industries have gradually returned to positive growth in 2003, with continued recovery expected next year. According to the 3Q03 version of the industry-standard IDC Black Book, to be released this week, worldwide IT spending is set for 5% growth to $916 billion in 2004, while spending on telecom services will show 4% growth to $1 trillion.

"Our forecasts are based on a relatively conservative set of economic assumptions," said Stephen Minton, IT spending analyst at IDC. "If the recent announcement of surging economic growth in the US is sustained, and the gradual improvement in international economies continues, we can look forward to a further uptick in IT spending expectations."

According to the new IT Black Book, which gathers IT spending data from 55 countries, total spending in 2003 will show a return to positive growth this year in the United States and emerging markets, although worldwide growth will remain inhibited by declines in Europe, Japan and Canada. While hardware revenues have been depressed by fierce price competition in spite of shipment growth, the gradual recovery in software and services spending will gather steam during 2004 as business confidence improves.

"The recent economic improvements will undoubtedly be good for many IT vendors, though growth will not return to dot-com heights," added Minton. "Pent-up demand within IT departments, particularly for mission-critical infrastructure, has reached unprecedented levels."

The recent report of rapid economic growth in the US, exceeding most expectations, will also translate into a positive impact on IT spending, according to IDC economist Kevin White. "Since the end of major combat operations in Iraq, the US economy and IT market have been poised for an upswing," said White. "There are signs that business investment is now rising."

The 3Q03 Telecom Black Book shows that data services growth will be 16% in 2004, while telco spending on equipment will show a long-awaited recovery to 7% growth in 2004 and 11% in 2005. "The telecom industry will finally return to increased equipment spending in 2004," said Ludovica Bruno, telecom analyst at IDC. "As the telecom winter gives way to a telecom spring, the rebound will reach 16.5% growth by 2007."

International markets, meanwhile, continue to offer improving prospects and stability. "Latin America will see a recovery to 7% IT spending growth in 2004," said Juan Orozco, IT market analyst. "This will include a rebound to double-digit growth in IT services markets next year."

IDC’s 3Q03 Worldwide Black Book (IDC #30334) presents a comprehensive view of worldwide IT spending patterns. Based on local market research in 55 countries around the world, the Worldwide Black Book looks at hardware, software and services spending and growth opportunities from a local, regional, and global perspective.

The Worldwide Telecommunication Black Book, 2003 (IDC #30329) provides new and updated forecasts for telecommunication spending in more than 50 countries around the world. Telecom spending forecasts for 2002–2007 focus on fixed/wireless, domestic/international, data/voice services spending, and networking equipment spending by enterprise, network service provider, and consumer for countries in all regions.

Highlights from the two Black Books will be presented by Minton, White, and Bruno in an IDC Telebriefing on November 6, 2003. To participate in the telebriefing, please contact Tammy Gilson-Hodge at 508-988-6746 or

For more information about IDC’s Worldwide IT Markets program or to purchase a copy of the 3Q03 Worldwide Black Book or The Worldwide Telecommunication Black Book, 2003, please contact Amie White at 508-935-4653 or

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. Additional information can be found at

# # #