Analysts bullish on IT spending; where will the money go?

Analysts bullish on IT spending; where will the money go?

Summary: Both Gartner and Forrester predict enterprise software will lead continuing IT spending surge through the next two years. Who benefits?

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Two of the leading IT analyst groups have issued forecasts for IT spending over the coming year, and things continue to look up -- thanks to an insatiable -- or perhaps pent-up -- demand for enterprise software.

Gartner says global IT spending will increase 2.5% in the coming year, topping off at $3.7 trillion. This actually was revised downward from predictions of a 3.7% rise made a couple of months back, but, according to Gartner, the revision is due a recent strengthening in the value of the U.S. dollar versus other currencies. In addition, the growth is softer than last year's torrid 7.7% expansion.

Things are accelerating faster within the United States, according to Forrester Research. The consultancy forecasts US tech market growth of 7.5% for the year ahead, revised upward from the 6.6% growth projected a couple of months back. For 2013, things will get even stronger in the USA, with 8.3% growth in IT spending.

Who's doing all this spending? Gartner says small businesses and telecoms will drive much of it. Government IT spending will "contract moderately," however -- mainly driven by austerity measures in the eurozone. US government IT spending will also remain flat and actually contract in 2013.  As reported here at this blogsite in recent months, the US federal government is getting aggressive about shared services, consolidating data centers, and using cloud resources.

In the small and midsize business market, which represents approximately a quarter of all enterprise IT spending, spending is forecast to reach $874 billion in 2012 and will grow to $1 trillion by 2016, Gartner predicts. "Throughout the forecast period, midsized business IT spending outperforms other sectors in each of the next five years, driven by growth in spending on enterprise software."

Enterprise software will help lead the way, in fact, with 5% growth in the year ahead.

Gartner's Forecast for 2012 Worldwide IT Spending Forecast (Billions of U.S. Dollars)

2011

Spending

2011

Growth (%)

2012

Spending

2012

Growth (%)

Computing Hardware

$404b

7.7%

$421b

4.3%

Enterprise Software

267

9.2

280

5.0

IT Services

845

6.5

856

1.3

Telecom Equipment

442

7.2

472

6.9

Telecom Services

1,704

6.3

1,721

1.0

All IT

$3,661b

6.8%

$3,751b

2.5%

Source: Gartner (April 2012)

Forrester also sees software leading the way in the US market. "Software growth will occur across all categories, but software-as-a-service (SaaS) applications, general business intelligence products, and specialized analytical tools will have the strongest growth. These products will help push total software sales growth up to 11.4% in 2012 and 12% in 2013."

Topics: Enterprise Software, Data Centers, Networking, Software, Tech Industry

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5 comments
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  • I know where...

    Executive bonuses!
    Nate_K
  • Contrary Opinion

    IBM just cut over 2,000 American workers during the February-March Resource Action, and ACS is cutting (they always do). The money is going to IT workers in India, not in this country. AND Big Blue has another round of cuts for June as part of the Roadmap (read that RoadKill) 2015 program. Let's face it - American IT staffers are being slaughtered for no other reason than India is CHEAPER.
    reisen55@...
    • CHEAPER - for what..

      Meaning of Cheaper - Decision Makers needs to learn.. What is the need for Cheaper hourly rate.. when the total cost of solution is many more times costly..

      I wish to talk about Cheaper is Costly at the end.. an e.g is Heart Surgery done for unreasonably cheap would only mean.. death is guaranteed.. Trust me I clearly see the need for Americans thinking of Cheaper had to change for Indians reacting with Higher Quality at Cheaper cost.. else both American and Indian IT & IT Products are at risk to either of them
      nagkumar
  • Me, me, me!

    You know I deserve it!
    jorwell
  • Budgeting for Corporate Officer Training

    Instead of paying exorbitant bonuses to corporate executives a budget for educating corporate executives in Information Technologies should be made mandatory by all the "Board of Directors" of these corporations.
    StevenDDeacon