It’s a good time to be in software sales. Vendor revenue for the software segment is expected to grow significantly faster than the rest of the IT industry this year, according to a new report from the market forecaster Forrester Research, Inc.

Let’s start with the big picture. Forrester, like many other research organizations, sees the U.S. economy slowing in 2007. As a result, U.S. IT sales are expected to reach only a 5 percent growth rate – the lowest since 2003. Furthermore, because the U.S. is the largest single technology-buying market in the world, this is going to depress sales, not just in the U.S. but also in regions of the world where U.S. companies are outsourcing.

For example, the slowdown in the U.S. is likely to ripple through Canada and the rest of the Americas, causing modest 3 percent growth. Similarly, after a blistering 12 percent growth in 2006, the slowing U.S. economy will have a severe negative impact on both Asian economic growth and Asian IT purchases, resulting in only 4 percent growth this year. In subsequent years, high growth in the Europe/Middle East/Africa (EMEA) region has provided a buffer for high tech firms when U.S. sales have dropped. Not this time. In the EMEA region, a hybrid of slow but steady growth of 4 percent in Western Europe, which when combined with stronger growth of 15 percent in Eastern Europe, the Middle East, and Africa, will still only result in 5 percent overall growth in this region.

Forrester vice president Andrew Bartels characterized the current situation as “a caution flag for IT vendors [because] 2007 will be a challenging environment," noting, however, that the 5 percent growth in the U.S. is better than Forrester’s original projection, issued earlier in 2006, that 2007 would see little or no growth in U.S. IT purchases. In either case, worldwide prospects for IT sales remain rather grim:

– Global IT purchases: up only 5 percent to $1.55 trillion, compared with 8 percent growth in 2006

– Global IT spending (personnel, facilities, etc.): up only 6 percent to $2.02 trillion, compared with 8 percent growth in 2006

– U.S. IT purchases: up only 5 percent to $527 billion, compared with 6 percent growth in 2006

– U.S. IT spending: up only 5 percent to 761 billion, compared with 6 percent growth in 2006

Don’t lose heart though. There is one segment of the IT market that’s going to grow fast – software! According to Forrester, software purchases will do better than average, growing 7 percent. While that’s down from 10 percent growth in 2006, it’s still more than a third faster than the rest of the IT industry. By contrast, computer equipment will continue to face slowing demand (up only 4 percent from 6 percent in 2006), communications equipment will slow down significantly (growing only 3 percent from 9 percent in 2006), while IT services and outsourcing will increase 4 percent (down from 8 percent in 2006.).

In other words, software is a bright spot on an otherwise grim canvas. Thus, while other sales reps in the IT sector are likely to be hard-pressed to make their numbers, you’ll be in relatively good shape. The complete report "Global IT Spending And Purchases Forecast, 2006-2007" can be purchased directly on the Forrester Website: www.forrester.com.