Chad Huston is one of the most respected IT market forecasters, specialising for several years on the IT services markets. Something shocking about his analysis of financial reports of IT services companies, which he has organised into ten main clusters of IT service providers: although none of these clusters is growing over 5% a year, some analyst firms continue to forecast sector-wide growth around 7%.
These forecasts cannot be right. The reported financial results and the forward-looking guidance provided to vendors are clear. It’s unimaginable that the market will grow even 5% this year, but many analyst firms are forecasting higher growth.
The forecasts are broken for many reasons, but the key reason is that most analyst firms are using buyers’ statements about expectations, which are as optimistic as my predictions for how often I will go to the gym next month (and for similar reasons). Other firms are using behind-the-scenes nudges from some vendors who report optimistic expectations. As a result, the forecasts are way out.
I’m hosting a webinar to discuss this with Chad and another IDC alumnus, Rory Duncan. Rory’s experienced the making of many market forecasts and has a lot to add to this conversation.
You can see more about the webinar here: https://bit.ly/TrueForecasts and register for free.
I recall at Gartner reviewing a Forecast analysis draft that reported the forecast was being adjusted downwards for the umpteenth consecutive quarter and suggesting perhaps not to admit that fact!!! — 20 year Gartner alum Michael Dornan
