Don't hold your breath waiting for the IT market to rebound

Anybody hoping to see the long-awaited recovery of the IT sector may have to wait a couple more years, according to analyst house Ovum, which today dashed hopes of a rebound in 2003.

The company warned that decision makers in the IT sector may be basing current predictions for next year on over-optimistic forecasts - building false hopes of a recovery.

Julian Hewett, chief analyst at Ovum, said: "Ever since the downturn began, it seems that the recovery has always been 'two quarters away'. It seems to us that the industry is still living in denial."

Major tech bellwethers have already unwittingly given their backing to Ovum's predictions. In the past week Oracle and EDS have both made warnings about the coming year. Following a 10 per cent fall in revenues for its first quarter, Oracle's CFO Jeff Henley said in a statement: "I am more pessimistic for the full year than I was at the start of the quarter."

Ovum's Hewett said: "Does this sound like a recovery in 2003? At Ovum, we are revising our estimates for the European software market in 2003. We now expect that market growth will decline about four per cent in 2002 and be flat at best in 2003."