IDC Canada is standing behind its prediction of 4.5 per cent growth in Canadian IT spending and the methods it uses to come up with its forecast.
Earlier this week, London, Ont.-based Info-Tech Research Group released a forecast of its own, estimating about $100 billion in Canadian IT spending by 2010. This was based in part on a surge in server, software and storage spending that would see this year’s spending grow by 5.5 per cent, according to Info-Tech. That’s higher than the four to five per cent growth IDC predicted in January, a fact Info-Tech managing director Michael O’Neil attributed to IDC’s approach.
“I have a pretty good idea of how it works over there,” said O’Neil, who led IDC Canada before joining Info-Tech. “Their primary input would be vendor-reported information.”
IDC Canada managing director Vito Mabrucco took issue with that statement, insisting that, like Info-Tech, IDC also conducts more than 10,000 end-user surveys each year. An accurate forecast has to be based on both, Mabrucco said, because you need to look at the actual revenues of various vendors.
“If someone wanted to size the car market and all they did is interview by people who bought cars, you couldn’t do it that way,” he said. “What bothers me is the guy who’s making that statement should know better. I know he’s been saying this to customers . . . it stains my brand and it really hurts the analysts that work hard on these predictions.”
The dustup underscores the budding rivalry between IDC Canada, which is a local arm of a large research firm with offices in several countries, and Info-Tech, which has been slowly offering similar products and services to Canadian and U.S. firms.
Mabrucco said companies should care about the way forecasts are made because the IT market is so complex and can be influenced by a variety of factors. This includes macro-economic data such as gross domestic product, interest rates and balance of trade, which IDC Canada also rolls into its analysis.
“We also have the global end user surveys from IDC, which is another 200,000. It doesn’t mean that what they do in the U.S. they’ll do in Canada, but our analysts can look at other trends around the world.”
Every year IDC Canada looks back at its predictions and admits where it fell short, Mabrucco added. Last year’s growth, for example, is better than analysts originally thought, although early indicators are that IDC Canada will continue to forecast about 4.5 per cent growth when it releases a mid-year report next month.
“I had a sense when we looked at al the numbers. I could tell confidence was increasing. I still think there’s upside to that. Our guys, if anything, tend to be conservative,” he said.