IDC’s survey of Canadian corporate IT indicates lower spending in 2009.

First, the good news: 2009 isn’t going to be like 2002. Corporate customers are not going to completely re-evaluate the role information technology plays in their business, as they did in the aftermath of the tech bubble. There will be no searing crisis of confidence. But there is going to be less money going around, and, to some extent, that’s going to hit nearly every tech-related sector. “Clearly, it is going to be more than a mild, one-quarter phenomenon,” says Vito Mabrucco, Toronto-based senior vice-president of IDC’s worldwide consulting practice.

IDC’s survey of Canadian corporate IT decision makers found 81% of respondents believe their spending will be lower in 2009. The approach most companies will take, however, will be to slow down or draw projects out over six to 12 months. “There is still optimism and an expectation, especially in Canada, that we will come out of this within a year,” says Mabrucco. “In IT terms, that’s not a long time. If they stop major projects completely, then a year from now, they’re going to have a hard time starting that up again.”

How bad will it get? IDC recently ratcheted down its growth forecast for Canadian IT spending in 2009 to 1.7% from 4%. (It predicted 3.4% growth for 2008). In the U.S., growth will be just 0.9%. Globally, worldwide IT spending will be up 2.6% in 2009, according to IDC (but not 5.9%, as it predicted in August), while rival firm Gartner Inc. expects, at worst, 2.3% growth. But even emerging technologies, like those characterized as Web 2.0 or cloud computing, will continue to find a market, in part because they don’t cost much upfront. In fact, the idea of paying for computing as it is used will be attractive.Security and networking technologies will suffer less, as will large-scale software systems that are seen to offer big operational advantages. Likewise, the strong demand for storage will not abate. However, growth will slow more sharply in mobile devices, as companies delay rollouts. In services like IT consulting and systems integration, spending will be flat, as fewer big projects go ahead in 2009.

As events in 2008 made clear, though, even grim forecasts can be too optimistic. Pick a calamity—large-scale bankruptcies in the auto industry or a major terrorist attack—and then what? IDC says IT spending in Canada would shrink 0.6%. Doesn’t sound like much, but IT spending has contracted only once before here—in 2002. And it would take some really bad news for that to happen. It forecasts revenues at Canadian tech manufacturers will decline 0.2%, with employment down 2%. In computer services, price-adjusted sales will rise 2%, the weakest pace since 1996.

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