IDC’s FutureScan: IT Buyer Expectations Start To Reflect Reality

FRAMINGHAM, MA – February 1, 2005 – IDC today announced the latest FutureScan results for the month of February. After months of unrealistically high buyer expectations for future IT spending growth, this month buyer expectations came in line with both the macroeconomic picture and IDC's forecast for the next 12 months, with the Buyer Intent indicator falling to 1065.

At the same time, the general market picture picked up somewhat as expectations for vendor revenues in the next six months improved after a seasonal lull in January, which helped drive the Market Indicator number up to 1059.

"For much of the last year, buyer expectations for growth in their IT spending over the next twelve months sat in the 7%-9% range, several times even hitting double digits" says John Gantz, IDC's Chief Research Officer. "This month they dropped under 7% – much closer to IDC's forecast for U.S. IT spending of 5.6% in 2005 and continuing a slow decline that began in November."

This congruence between user expectations, which can vary from month to month and survey to survey, and IDC's market indicators helps reinforce IDC's modest forecast for IT spending in 2005 and beyond.

"At the beginning of 2004 both the buyer intent and market indicators were higher than IDC's forecast for the year," added Gantz. "But over time the indicators came down and the forecasts held up. This is the advantage of relying on multiple inputs, structured methodologies, and knowledgeable analysts in putting together IDC's forecasts."

The positive macroeconomic indicators include U.S. GDP and profit forecasts for 2005, the recent improvement in the stock market, and historically low interest rates. Negative pressures are expected to come, however, from oil prices that IDC expects to remain high and the possibility of the dollar falling further against other currencies during 2005.

FutureScan is a set of market metrics that measure supply and demand in the IT industry based on leading indicators and customer surveys. Values reflect expectations of future growth, with an index value of 1000 indicating zero growth and each additional 10 points representing roughly 1% of expected growth or contraction.

FutureScan results for February and prior months can be viewed at www.idc.com/futurescan .

For more information about FutureScan, or any other products from IDC's Global Research Organization, please contact Amie White at 508-935-4653 or awhite@idc.com.

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 http://www.idc.com.

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