Ovum sees little growth in IT spending
In June, when technology analyst Ovum completed its report on the IT spending plans of the global financial markets' industry, it was probably fair enough to believe the global economy was on the up, and that IT spending in Asia-Pacific would reach US$18 billion by 2015.
But the fact that Ovum chose to release the two-month-old report in Australia yesterday, on the heels of the global market rout, left its predictions looking distinctly out of whack with market sentiment.
Just last week almost A$100 billion was knocked off the value of the Australian share market alone - making Ovum's prediction that the global financial markets' sector had recovered sufficiently from the first global financial crisis to invest $US90 billion in information technology sound somewhat hollow.
Ovum's media release was, however, still upbeat about strong Asia-Pacific growth, a resurgence of confidence in hedge markets, and the IT spending impact of the looming Basel III requirements. Clearly, Ovum's marketing department did not read the portents of the Standard & Poor's US downgrade or the jitters regarding European debt the same way the share market did.
In tracking the past spending of the Australian financial markets' sector, Ovum reported that for the last five years IT spending has chugged along around the $US1.5 billion a year mark.
It had, however, forecast a modest 1.5 per cent compound annual growth rate, through to 2015, when it expected annual spending by the local financial markets' industry to reach almost $US1.7 billion.