The economic downturn will not affect every region in the same way, allowing for some new technology investment opportunities to survive. The widely predicted downturn in global IT spending will also not have a uniform impact on every country, industry or technology vertical, a new report has found. Instead a report, published today by analyst Datamonitor and based on the responses of 520 IT decision makers, revealed many were more interested in improving efficiency than cutting costs.

Gartner Reports that Global IT spending will rise in 2009 - slightly. While IT spending is projected to decline in some industries in 2009, the prognosticators at Gartner are so far saying that despite the economic meltdown, IT spending across all industries and geographies will rise a tiny bit. Some industries and geographies are going to do better than others, of course. And there are some areas that are not going to see growth at all.

Gartner this week put out a report called Dataquest Alert: Utilities, Healthcare and Government Lead IT Spending Growth in Challenging 2009, providing some analyses of IT spending with an industry and regional flavor, in contrast with to the traditional high-level IT spending projections Gartner, IDC, Forrester, and others do.

As a teaser for the report, Gartner has released some of its models of IT spending for 2008 and 2009. Here’s an interesting table that shows IT spending for last year and projections for this year by industry:
  
 
                                                     2009                2008                 Change
Industry                                         IT Spending     IT Spending       2008-2009

Utilities                                          $131.8bn         $128.1bn           2.9%

Healthcare                                     $88.0bn           $86.1bn             2.2%

Government                                   $428.3bn         $419.5bn           2.1%

Communications                             $371.5bn         $268.3bn           0.9%

Education                                       $60.0bn           $59.3bn             1.0%

Agriculture, Mining & Construction $29.7bn           $29.4bn             0.9%

Services                                          $192.6bn        $190.3bn           1.2%

Retail Trade                                    $153.8bn         $153.3bn          0.3%

Transportation                                $105.8bn          $105.1bn         -0.2%

Financial Services                           $554.4bn          $558.5bn         -0.7%

Wholesale Trade                              $81.4bn            $81.2bn           0.4%

Manufacturing                                $479.6bn          $482.7bn          -0.6%

Total                                             $2,676.8bn     $2,662.8bn           0.5%

Source: Gartner

According to this table, only three industries are going to see negative growth, as IT prognosticators are apt to say. (They don’t like the word “decline.”) And it should also be pointed out that the data shown above is global IT spending by industry when in U.S. dollars.

“The economic slowdown triggered by the U.S. subprime market crisis, along with fluctuating oil prices and currency exchange rates impacted many industries and countries around the world in IT spending,” explained Gartner research vice president John-David Lovelock in announcing the report. “Internal spending, hardware, and system integration in the financial sector were particularly hard-hit in 2008 and will continue suffering through 2009. In contrast, healthcare grew 8.3 percent worldwide in 2008, and utilities grew 7.7 percent.”

Lovelock says the uneven impact of the economic meltdown will continue to be reflected in uneven IT spending growth or decline across industries. Healthcare, utilities, and government IT spending are going to get the lion’s share of the growth this year, it looks like, and for all the talk of declines in IT spending among financial services companies, the declines are more modest than perhaps many would have expected, given the dire straits many companies are trying to negotiate through.

Lovelock says that financial services companies in the U.S. will be hit hard, and their IT spending will reflect this. But he explains that some of the declines will be mitigated because the meltdown wasn’t as difficult for banks, brokerages, and insurance companies in the Middle East, Mexico, and Canada.

In the United States, the economic stimulus package signed into law last week by President Obama is helping out the utility, communications, and healthcare industries. The bill includes tens of billions of dollars in spending related to expanding broadband Internet coverage, modernizing health records, and retrofitting the electrical grid with some embedded computing intelligence to make it run more efficiently.

When you add it all up, Gartner is projecting that IT spending (in which it groups hardware, software, services, telecom, and other things) will grow by 0.5 per cent in 2009 to just under $2.7 trillion. Spending in the United States, even after the effect of the economic stimulus law, is only going to rise by 0.1 per cent, says Gartner, with spending among healthcare companies rising by 2.6 per cent (faster than the global average) and financial services companies seeing a 2.2 per cent decline in the States (more than three times the global decline).

Gartner is forecasting that IT spending in the EMEA region will decline by 0.3 per cent (utilities do the best and services firms do the worst), while rising 4.4 per cent in Latin America and 2.9 per cent in Asia/Pacific. Brazil, India, China, Argentina, Chile, and Peru will lead the IT spending charge in these two regions, but Japan is expected to see a 0.1 per cent IT spending decline this year.

Of course, the kind of growth you see depends on how you count up the sales. As a recent IT spending forecast put out by rival Forrester back in mid-January pointed out, it makes a difference whether you count sales in the local currencies where the IT gear is being acquired or convert it back to U.S. dollars (as the biggest IT players certainly do). Forrester expects IT sales worldwide to contract 3 per cent in 2009 when measured in dollars, but when measured in local currencies, they’ll rise by 2.5 per cent.

Gartner did not provide a reckoning of its own numbers in local currencies, but the same currency exchange rates prevail; that doesn’t mean the underlying assumptions and numbers for spending in their respective models bear much of a resemblance. Gartner is counting a lot more things as IT spending than Forrester, which said back in January that the IT market will hit $1.66 trillion in 2009, down 3 per cent compared to 2008’s spending, versus Gartner’s $2.68 trillion, up 0.5 per cent.

    Welcome to the industrial software blog.  I’m going to use this blog as a site to review industrial software technology and manufacturing systems.  I like doing this type of writing because it’s the type of technology that I work with every day.  I build industrial applications and MES systems.  MES stands for Manufacturing Execution System.  Hopefully I’ll build something that will be of interest and I’ll share my experience.  I also do a lot of reading about industrial systems and I’ll try to post some feed back on those as well.

    Industrial software usually consists of systems that are used in shop floor reporting.  These systems include the following types of applications.  Quality Management, Production Performance Reporting, Supply Chain Management, Job tracking, Production Planning and Information Control or document management systems.  I’ll try to do some posts on a wide variety of applications that are contained within these areas and I hope that you’ll find my blog to be a valuable resource.   Please feel free to leave me some feedback and let me know what you think of the posts.

     The work that I do in manufacturing is generally scheduling and production control systems.  Things like OEE reporting.  OEE stands for Overall Equipment effectiveness and it’s a calculation that includes performance, downtime and quality numbers that are used to calculate the OEE ratio.  The reason that a lot of people like this measurement is that it can help balance the production line if used correctly.  Sometimes if you focus on only one of the metrics you can lose control of the others.  As an example if you focus too much on Downtime you can damage quality and the reverse can happen as well.