Nick Carr will write a post about this article in the next 4 hours (probability .8)

Update: Woo hoo!

Well Nick didn’t post on this article (update, see above) which either means the observer effect is at work or I’d make a lousy Gartner analyst. Anyhow, the highlights of this article on IT spending growth:

- Gartner released its latest IT spend survey and project corporate IT spending will grow at 2.7% this year
- Gartner analyst Ken McGee proceeds to chalk this modest growth rate up to a fundamental lack of faith in IT spending on the part of business executives
- Moreover according to Ken, “This trend could put the future of the CIO and the existence of the IT department under threat.”

Yikes. One projection and the whole high tech industry fell apart.

This analysis is so goofy it’s hard to choose where to begin. Well, let’s try:

1) Gartner stands alone in its projections. Morgan Stanley’s most recent CIO survey projected IT spending will grow more than twice (6%) as fast as what Gartner predicts. CIO Magazine is predicting close to triple (7.8%). Forrester is also going for 7%.

2) Even if Gartner has the most accurate prediction, the histrionic comments that ensue about the downfall of the IT industry and the CIO represent huge logical leaps that are not really substantiated (at least in this Silicon.com article) by anything except Ken McGee's quotes.

3) Mid single digit growth is actually a big success. Let’s not forget IT is now over $1 trillion; one of the world’s largest economic sectors. IT is also highly deflationary, so the volume of IT consumption grows much faster than IT spend. This implies our industry is continuing to generate enormous amounts of new value for customers and users.

4) Unless we can start eating and wearing computer chips, it’s inevitable that IT spending growth starts tracking closer and closer to overall world economic growth. That’s not failure, that’s just a mathematical fact.

5) Looking at overall growth rates in a $ trillion market is a pretty meaningless exercise to begin with. Hardware spend is aggressively shifting from RISC/Unix to CISC/Linux. Virtualization is on the rise. The application server market is bouncing back. The IT services industry getting completely recomposed. All the important stuff that’s happening in this industry is completely lost with these sorts of studies. I’d really like to see these research resources shifted over to some more value-added thinking.