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`Indian vendors could go in for branding as it is a big thing in the US.'

Bangalore , Nov. 14

FORRESTER Research Inc on Friday predicted a 4-per cent rise in overall IT spending in 2004 in the US, compared with a 1-per cent dip the firm had foreseen for 2003.

Commenting on the estimates of future IT spending while addressing clients in Bangalore, Mr George Colony, CEO of Forrester Inc, said the biggest increases in US spend would be in segments such as computer and peripheral equipment at 9 per cent, IT outsourcing at 7 per cent and software 6 per cent.

Suggesting that the Indian vendors go in for branding as it was "a big thing in the US," Mr Colony said that he saw no great impact of the Presidential elections next year on offshoring of IT services to India. Citing from a recent Forrester survey, Mr Colony said IT spending in North America during 2004 would go up by 1.7 per cent as compared with a growth of 1.9 per cent in 2003. "It is not a very rosy outlook for next year," he said, adding the biggest increase in spending would be in retail, insurance and IT infrastructure.

The survey involved 850 North American companies with a turnover of over $1 billion.

The survey also had mixed news for Indian IT vendors, forecasting an average 5 per cent drop in the use of outside IT services. However, 65 per cent of the companies already engaged in utilising offshore service providers said they would spend more on offshoring.

"Our survey shows that companies either love offshoring or hate it," he said suggesting that the rest (35 per cent) posed great opportunity for Indian vendors to break into their accounts.

On technology trends, Mr Colony said he foresaw the current fragmented infrastructure being replaced by `organic IT,' with emphasis on Web services and shared pools.

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