IDC now says that in 2009, global IT spending will increase 2.6 percent, down from its earlier forecast of 5.9 percent. In the U.S., IDC expects IT spending growth to be 0.9 percent, down drastically from its 4.2 percent growth forecast made in August.

Growth in the online sector is also expected to weaken dramatically. Citigroup issued a research note Wednesday saying that "the growth rate for online advertising is likely to slow materially in Q4 for the top four e-commerce companies (Amazon, EBay, Expedia and Priceline) from an average of 25 percent year on year growth in Q3 to 8 percent year on year growth in Q4. At some level Google will be impacted."

This weekend, leaders of the world's biggest economies are gathering in Washington, D.C., to grapple with a widening downturn that started in the financial sector. Even though the U.S. and European governments have pumped hundreds of billions of dollars of public money into financial institutions, credit markets are still tight and general confidence is lower than ever.

Some banks have declined to specify how they are using the public funds but appear to be hoarding the bailout money for acquisitions, instead of increasing lending. If the government officials can make banks use the funds they were given to start pumping money through credit markets, and bring some transparency to the bailout process, it might go a long way toward restoring confidence among the general business community. The collapse of credit markets, caused by the bursting of the U.S. real-estate bubble, is the core reason for lowered expectations for IT.