(SINGAPORE) It will not be all doom and gloom in the Asia-Pacific's information technology sector next year.

Despite the current global economic woes, which shows no signs of abating, IT spending across the Asia-Pacific excluding Japan (APEJ) is still expected to grow by at least 8.3 per cent in 2009, according to an assessment by research agency Gartner.

Matthew Boon, Gartner's managing vice- president, told The Business Times that Singapore organisations are expected to delay computer hardware upgrades and large technology projects, and focus instead on efforts to improve client retention and acquisition.

But the APEJ market as a whole should expand to US$585.7 billion in 2009, implying an 8.3 per cent growth. This is, however, Gartner's worst-case growth forecast. It had earlier projected 11 per cent growth in 2009 for the region.

Worldwide, Gartner research shows a worst-case scenario will see global IT spending increase 2.3 per cent in 2009, down from an earlier projection of 5.8 per cent.

Under such circumstances, the hardware sector will be hardest hit, followed by the IT services sector. Software spending will remain resilient at 8.6 per cent.

Gartner does not expect the global IT industry to see the same type of dramatic spending reductions witnessed during the dotcom bust.

Mr Boon said this was because organisations now view IT as a way to transform their businesses, and adopt operating models that are much leaner.

'IT is embedded in all aspects of the business and is a critical part of multi-year transformation projects that are difficult to cut.'

On Singapore spending numbers next year, Mr Boon said the pattern should be similar to all other mature IT markets.

'We see caution creeping in to many organisations now and we expect associated delayed decision making to pan out into protracted delays and in some cases cancelled projects,' he said.

Mr Boon noted that software spending, and to a degree services spending, is somewhat cushioned due to ongoing licensing and contractual commitments.

'Hardware replacement cycles may well be delayed, however caution is required in those situations lest the cost of extended maintenance and warranty periods blows out costs in excess of replacement.'

Mr Boon expects chief information officers to concentrate on preserving essential IT spending, particularly when such spending is related to three key areas - business process efficiency driving cost reduction and competitive advantage, critical infrastructure projects, and strategic investments in technology migration.

These include moving to new and more efficient infrastructure built around virtualisation, cloud computing and environmental sustainability concepts.

Mr Boon expects Asian providers of IT infrastructure, especially hardware, to be fairly strongly hit, particularly when attempting to enter new high-volume, low-margin consumer and low-end business environments. 'Now is not the time to foray into that space.'

Asian IT providers need to remain focused on their core markets and products, while absolutely refraining from de-investing in go-to-market and marketing initiatives, he said. 'In this environment multinationals are looking to cut costs across the board, this in itself could offer opportunities to the astute local players. However, to de-invest will reduce competitive advantages, while also sending a negative message to APEJ organisations which are looking for commitment from their providers.'

Mid to long-term, IT spending in Singapore and the region at large will tighten, said Mr Boon.

'The APEJ growth engines of Vietnam, China and India will continue to invest, and we would expect the mature markets such as Singapore and Australia to pull back.'

Despite this, organisations in mature markets must continue to invest in critical infrastructure projects that improve business process and efficiencies, and enhance green IT initiatives while also increasing competitiveness, Mr Boon added.

While planning for potential cost-cutting, contingency worst- case budget planning is important. It is also critical that markets such as Singapore and Australia do not weaken their competitive position versus the emerging markets during this time, Mr Boon noted.

He said: 'The slowdown or recession will ultimately start to end as quickly as it started and all APEJ organisations need to be planning for that as much as they do the slowdown.'