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     PRESS RELEASE
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Andrea Loziuk (IDC)
416.673.2204 office
aloziuk@idc.com
www.idc.ca
     


Nigel Wallis (IDC Spokesperson)
416.673.2242 office
nwallis@idccanada.com
www.idc.ca

New IDC Research Estimates Canadian Businesses Will Slash C$415M from ICT Budgets as Result of Falling Oil Prices

- January 23, 2015 -

Canadian firms are expected to cut upwards of C$415M from their Information and Communications Technology (ICT) budgets as a reaction to falling oil prices in the country according to the latest figures released by International Data Corporation (IDC). The Impact of Declining Oil Prices on the Canadian ICT Market, is a new presentation report that examines the first-order impact of the freefalling price of crude oil on the Canadian ICT sector, including hardware, software, services and telecom.

“The rapid decline in energy prices won’t leave the ICT sector unscathed” says Nigel Wallis, Research Director for Vertical Markets at IDC Canada. "With the worldwide price of crude oil continuing its decline from over US$100 per barrel to below US$50, the Canadian energy patch has already announced reductions in planned 2015 capital expenditures that collectively amount to over C$9B less than 2014. We anticipate that as a first-order response, Canadian firms and governments will cut over $415 million from their ICT spend in 2015, predominantly in Alberta."

In addition, IDC Canada's research anticipates that:

  • The energy sector in Canada will spend over C$240 million less in 2015 than previously expected.
  • The public sector will look to shed over C$165 million in 2015 from original expectations.
  • Alberta will move from Canada’s fastest growing region for ICT spend to the slowest in 2015 and 2016.
  • Both industries will turn to ICT technologies, such as collaboration, analytics and sourcing, in order to save more money through re-engineering their processes to run their business more efficiently.

The IDC Presentation examines how energy and government CIO's will react to their new business environment, while proposing a new scenario for relevant ICT spending forecasts including hardware, software, services and telecom. In addition, it offers recommendations for CIO's and ICT vendors on how to shape a pro-active response to the cost cutting.

"Technology plays a critical role in innovation and re-engineering business processes" adds Mr. Wallis. "With these anticipated changes to the market and to organizations' budgets, it is vital that executives understand the value of their investments and the ways in which technology can actually make their firms more efficient in these challenging times."

ABOUT THE IDC RESEARCH

The Impact of Declining Oil Prices on the Canadian ICT Market (IDC#CA0VM15) examines the first-order impact of the freefalling price of crude oil on the Canadian ICT sector. Worldwide price of crude oil has continued its decline from over US$100 per barrel past the US$50 bbl mark; Canadian businesses and governments are facing the downside of the commodity cycle — What to do when the bubble bursts? The Canadian energy patch has already announced reductions in capital expenditures that collectively amount to over C$9 billion less in 2015 than the year before. Meanwhile, all three levels of government await the decline in their budgets caused by a shortfall in resource royalties. For each C$1 per barrel drop in the price of Alberta's oil over a 12-month period, the provincial government takes in C$215 million less in revenue.

ABOUT IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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