BY WINSTON CHAI

THE regional technology market will be healthier in 2010, with tech spending by Asian companies projected to rise 8.8 per cent. But IT companies will still have to fight tooth and nail for jobs because the market outlook will not be back to pre-crisis levels, says a research firm.

According to Springboard Research, tech investment in the Asia-Pacific region excluding Japan is expected to return to a more 'normal state' next year. In line with the recovery, the amount spent by regional IT buyers is projected to be 2.4 percentage points higher than in 2009.

Although the world was mired deep in recession in the first half of 2009, technology spending was affected as much in this region as it was in others. Driven by the twin economic turbines of China and India, IT investment in the Asia-Pacific region still grew 6.4 per cent in 2009, Springboard says.

'Asia has fared better than the rest of the world and this can be seen through IT spending in the region. While Asia has taken its lumps, it is emerging much quicker and this is reflected in IT spending,' Springboard says in its Asia-Pacific Predictions 2010 report.

'In our view, most industry pundits became too swept up in the fear and panic of Q4 2008 and overreached when forecasting IT market contractions.'

Although Asian companies will loosen their technology purse strings in 2010, the road to recovery could still be bumpy.

'IT solutions providers can expect sales cycles and the quality of prospects to improve over 2009, but to remain more challenging than in the quarters preceding the global financial crisis,' Springboard says.

For example, macro factors such as the political instability and security risks faced by some Asian countries could affect market sentiment.

'We expect economic concerns to arise - such as the Dubai debt incident of December 2009 - but we do not believe they will be significant enough to derail global economic recovery,' says Springboard.

Among the hot technologies for this year are analytics solutions that will make use of data and predictive modelling technology to help support business decision-making.

'The key industries, where stronger initial adoption is expected, include financial services, the retail sector in developed markets, telecommunications, fast-moving consumer goods and the public sector,' says Springboard.

Besides analytics, cloud computing, desktop virtualisation and cashless payments are among other areas that are expected to boom in 2010.

A recent poll of some 40 technology companies by BizIT lends weight to Springboard's predictions.

'The economic situation in the Asia-Pacific is slowly getting more stable and in spite of the turmoil in Dubai, things are still moving in the right direction,' says Paul Chen, systems engineering director for network equipment maker Avaya Asia-Pacific.

And according to Girja Pande, regional head of Tata Consultancy Services: 'I think very clearly we are seeing green shoots that are now giving us healthy growth. Our order books are strong, and though it's prudent to be cautious, I think we will now see growth coming back to a certain degree, especially in the Asia-Pacific.'

On the business software front, the small and medium enterprise and manufacturing sectors will be two bright spots in 2010, says Bryan Tan, Epicor's vice-president of sales in Asia.

But while the outlook will be rosier than 2009, some tech executives believe it is still not business as usual.

'The worst financial crisis in living memory could never come to an end so quickly. Having said that, 'Singapore was the first Asian nation to suffer from the global crisis and then became the first to record positive economic growth, taking analysts completely by surprise,' notes Gavin Selkirk, corporate senior vice-president and general manager for CA Asia-Pacific and Japan.

Adds Symantec's vice-president for Asia South Eric Hoh: 'It will take time for the effects of the crisis to fully subside, but we are seeing more companies rolling out plans that were previously put on hold as a result of the sudden economic crisis.'

This article was first published in The Straits Times.