The Hindu Business Line : Forrester sees slowdown in US tech spend

Technology research firm Forrester foresees a slowdown in the US tech spending owing to the current account and budget deficits and rising interest rates. But, the effect of such a slowdown would not have any significant impact on the Indian IT firms, said Mr George F. Colony, CEO of Forrester Research.

Fourth Wave

The US tech spending, which was up around 8 per cent this year, would slow down to around 3 to 4 per cent in 2007, Mr Colony said at a roundtable on `Emerging Technology Trends' organised by Wipro on Thursday. The impact of the slowdown would be `very mild,' but typically what happens in the US when tech spending goes down is a shift of cost over here, he said.

The predicted slowdown would happen before what Mr Colony calls the "Fourth Wave" in technology trends, which would take-off in 2008-09. The first wave of IT saw the rise of mainframe computers beginning in 1956.

According to Mr Colony, in the fourth wave, which would dramatically change the computing world, the Web would be replaced by a different technology and it would be driven by what he called `Executable Internet', `Extended Internet' and `Social Computing'.

Internet Devices

Dwelling on `Extended Internet,' Mr Colony said as many as 750 million devices were now connected to the Internet and around $2.7 trillion would be invested in Internet devices and services by then. "It is bridging the physical world to the Internet world. Extended Internet is happening now," he said.

Further, Mr Colony felt that the Indian IT services firm would not be able to sustain their present net margins, which were very high. The Indian firms, which are seen aggregating lot of cash, should make good use of it by acquiring large companies to expand their global footprint and also expanding their capabilities, he said.

The Fourth Wave would throw open many new opportunities for Indian vendors as many new products, software and websites have to be built. Mr Colony observed that the Government had to improve the education system to ensure better quality labour and also provide better infrastructure.

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