Global IT spend to continue upward trend

Global IT spend to continue upward trend

Summary: IT expenditure, spurred by investments in computing hardware and cloud services, expected to grow 7.1 percent this year in spite of disruptions to global supply chain caused by Japan's earthquake, Gartner says.

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The worldwide IT spend is expected to grow by 7.1 percent this year, driven primarily by computing hardware purchases and public cloud services and in spite of disruptions to the global supply chain caused by the natural disasters which afflicted Japan, reported Gartner.

Released Friday, the research firm said the revised growth in percentage was raised from its original projection of 5.6 percent, which was announced in its first quarter update. The overall IT spend is now expected to reach US$3.67 billion.  

Of this positive revision, Richard Gordon, Gartner's research vice president, expressed "a bit of a surprise" that the disruption of supply of critical components due to the Japan earthquake and tsunami did not impact overall IT spending.

"It is a bit surprising that we have not seen a more significant impact on our global IT spending forecast as a result of the Japan earthquake and tsunami, but despite widespread concerns about disruptions to the supply of critical components in the initial aftermath of the natural disaster, there has not been a dramatic impact on overall IT spending," he noted in a press statement.

He added that for Japan, specifically, Gartner expects its IT spend to be down in local currency but see a positive growth trend emerge in the second half of the year and continue into 2012.

Asia-Pacific as a region will likely see IT expenditure grow 11 percent in 2011 to constitute US$660 billion of the total spend, the study noted.

Hardware, public cloud services key drivers
Enterprise hardware was identified by Gartner to be the top growth segment in terms of IT spend this year, hitting 11.7 percent and representing US$419 billion of the total expenditure. While the percentage growth is slower as compared to 2010 at 12.1 percent, its sales are expected to top last year's US$375 billion, the study showed.

The telecoms sector, however, is expected to see the most sales activity, garnering US$2.14 trillion and registering growth of 6.9 percent, the study revealed.

Meanwhile, public cloud services spending is expected to outpace growth of the overall IT spend by about four times, Gartner stated. The industry can expect US$89 billion of sales in 2011, up from US$74 billion last year. This growth will continue into 2015, when spending will reach US$177 billion.

That said, this growth will only make a small dent on the make-up of global IT expenditure as cloud services spending will grow from 2 percent to under 5 percent between 2010 and 2015, it added. 

"Nevertheless, the emergence and adoption of cloud is an important trend, and in some markets, it's already a significant factor," Gordon said.

"For example, at about US$10 billion, software-as-a-service (SaaS) already accounts for 10 percent of enterprise applications software spending, and by 2015, this share is expected to increase to close to 15 percent and exceed US$20 billion in annual spending."

Topics: IT Employment, Apps, Banking, CXO, Cloud, Software

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