Wednesday, 10 September 2008

Forecaster takes Reality Check

Many readers will remember how I very publicly expounded my amazement at the presentation at the Regent Conference in Feb 08 from Brad Holmes, VP at Forrester. He predicted that US IT spend would be back to double digit growth in 2009 and 2010 after slipping from 6.2% in 2007 to 2.8% in 2008. In itself, the 2.8% growth in 2008 is half what Forrester was forecasting in late 2007. I very publically challenged both Brad, and anyone else in the audience, to a bet that double digit IT growth would NOT occur in 2009/10. Nobody was prepared to take bet against me. See my 7th Deb 08 post Buyer beware the forecasters.

It wasn’t the first time that Forrester has amazed me with their “Don’t worry the sun will be out again soon”. EG in 2002 it was is "double-digit growth will resume in 2003". The actuality was 3%. They then predicted it would resume in 2004. That didn't come to pass either. It is also worth looking at the forecasts they made in the late 1990s for growth in the early years of the new millenium.

I suppose, what really bugs me is that at these times I seemed to be in open warfare with many in the industry - when I turned 'bearish' in 1998 with my Y2K Lockdown forecasts for 1999, in 1999 for my "The headache will not go away with the Alka Selzers on 1st Jan 00" and again in 2002 with my "IT's all over?" speech and paper.

You really do get the feeling that many in the industry prefer to believe the forecasters who tell them what they want to hear – with little regard for what is really happening or the track record of the forecaster.

Anyway, it looks as if Forrester has finally taken a reality check and, I assume, is no longer making such crazy growth forecasts for 2009. See FT 9th Sept 08 Tech Sector. “Research released by Forrester on Tuesday found that 43% of large global companies have cut IT budgets this year, adding to mounting gloom…. A recovery in the sector will not come until demand shows clear signs of reviving. Historical trends suggest that may not be before the second half of 2009 at the earliest.” A more detailed review of the Forrester research from Marketwatch Impact of economic downturn in IT spending should you still think their research has any credibility.

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