• 12/28/2001
    2:00 AM
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Slim Pickings in Giga Forecast

Storage service providers might get some solace from an otherwise gloomy view of IT spending
The latest numbers from research firm Giga Information Group Inc. could be good news for the beleaguered storage service provider industry.

Although the majority of the report is downbeat -- IT budgets fell more in 2001 than the firm had previously estimated, and the rebound in 2002 will be disappointing -- there is some good news buried in it.

Within the IT sector, management software and consulting/outsourcing vendors will do better in 2002, with growth in spending of 8 percent and 12 percent, respectively.

If Giga is right, this is a major bonus for the ten or more struggling storage service providers (SSPs) out there that morphed their businesses in 2001 from the failed storage-on-demand model to selling management software and consulting services. They could actually end up in the right place at the right time for a change (see SSPs Switch to Selling Software and Sanrise Wakes Up).

Based on changes in the economic picture since September, Giga is revising its forecast for U.S. IT budgets downward for this year and next. Total IT spending in 2001 is now expected to be down 5 percent from 2000, a drop of 2 percent, and up 4 percent instead of 7 percent in 2002, Giga estimates.

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