Trend-spotters are excited by the possibilities offered by Apple's iPhone.

Trend-spotters are excited by the possibilities offered by Apple's iPhone.

Spending on IT is expected to be hit in 2009 as the financial meltdown continues to dominate global economics. According to IDC, spending will still be higher than 2008, although the market analyst firm has slashed its local and global growth forecast.

Ullrich Loeffler, who takes charge of IDC New Zealand this year, says the New Zealand IT (information technology) market is expected to expand by 3 per cent in 2009, instead of a pre-credit-crunch forecast of 4.4 per cent. That represents US$63 million ($107.5 million) of sales that will not now materialise.

New Zealand, which on a ratio of IT spending to GDP is the 11th most IT-intensive country in the world, fares better than the global market. IDC had been forecasting worldwide IT market growth of 5.9 per cent but has wound that back to 2.6 per cent.

Hardware sales will feel the brunt most sharply, followed by software (wallets are expected to snap shut on purchases of software for home use), IT services and telecommunications spending.

Rather than flock to new technology, organisations will be looking for more efficient ways to provide their IT and communications services during 2009, says Loeffler.

Operational costs - what Loeffler calls "keeping the lights on" - account for about 80 per cent of IT spending in New Zealand organisations. The focus in 2009 will be finding ways to trim those fixed costs, through such means as exiting software maintenance agreements and renegotiating telco contracts.

So what will the technology trends of 2009 be?

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Organisations will be reluctant to make major capital spending commitments on IT in 2009, says IDC's Loeffler. That will apply even where open source alternatives promise long-term savings over existing systems.

The necessity for software maintenance contracts will be questioned and spending will be confined to "must-have" items with "nice-to-haves" being struck off shopping lists. In that category will be desktop operating system upgrades - if Microsoft was already finding it hard going persuading customers to give up Windows XP for Vista, it will now be tougher than ever.

Technology innovation could slow due to cuts in R&D spending but consolidation among suppliers is on the cards as vendors with plenty of cash on their balance sheets go on a shopping spree. IBM, Hewlett-Packard and Microsoft are potential splurgers on niche technology companies or supplier partners in foreign markets.