Below are excerpts on the IT Scenario in 2007 based on a newsletter from Forrester:

1. Growth in European IT spending is starting to match or exceed US IT spending - European IT spending will grow by 5.1% in 2006 - almost as high as the US growth of 5.8% - before slowing to 3.7% in 2007 in parallel with the US IT spending slowdown to 2.9%.
O2. Overall European IT spending still lags the US -- $565 billion in 2006 (€448 billion) versus $721 billion.
3. New investment in computer equipment, communications equipment, and software will grow by 4.5% in 2007 after 2.1% growth in 2006 due to cautious European CIO spending plans.
4. European IT - UK now is the largest market overall, although Italy leads in telecom equipment and Germany in IT consulting and outsourcing. The smaller markets are growing faster than the larger ones.
5. 2006 growth rate for IT purchases is strongest in Spain, France, the Netherlands, Finland, Greece, and the Central European countries
6. IT Goods & Services - Despite the positive short term outlook, caution is still the word of the day
7. Web 2.0, software-driven computing will likely lead the next charge post 2008
8. Global purchases of IT goods and services will reach $1.55 trillion in 2007, growing by 5% following 8% increases in both 2005 and 2006.
9. Pricing - Multicore software licensing is the main new factor driving up the complexity of enterprise software pricing, but widespread use of virtualization techniques will soon make matters worse.
10. IT sourcing pros must create new models and tools (like the one included in this document) to ensure the best balance among software feature/function, IT cost predictability, and cost efficiency.
11. IT will transform relationship management into IT demand management (IT DM), a standalone group reporting directly to the CIO and with a seat on the business units it represents.
12.IT DM will synchronize the balancing of business' demand with IT's delivery through six PMO processes: portfolio, pricing, performance, program, project, and positioning management.

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Prashanth Rai