Spending in '09 Will Go to Infrastructure, IT: Analyst

Friday, 2 Jan 2009 | 7:24 AM ET

This year will be a better one than 2008, although it will start off very badly, and investment is likely to take place primarily to the infrastructure and IT sectors, Ralph Silva, director at TowerGroup said Friday.

"We're not going to see a lot of innovation happening in 2009... But we're still going to see expenditures in IT, see expenditures in infrastructure," he told CNBC.

2009 Will Be a Slightly Better Year
2008 was a black year. 2009 is going to be a little more grey. It's going to start off very badly simply because we still have to deal with a lot of issues from 2008. But it's going to end off fairly strong, Ralph Silva from TowerGroup said Friday.

This year is also going to be all about efficiency, according to Silva, and companies will have to aim to do things better and cheaper because customers will want things at a more reasonable price.

The first half of 2009 is still going to be difficult, so we are not going to see investments or big deals happening at this time, he notes.

"We're not going to buy new infrastructures or new technology. However, we're going to through a three, four, five-month period at the beginning of the year where businesses are going to start to realize that they have to invest in infrastructure because it's going to be falling down, falling apart, and they're not going to be able to be competitive," Silva said.

In the summer, we are likely to see more IT and infrastructure deals happening, so that by the end of the year, more vendors are going to be doing fairly well, he predicted.


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