Global IT spend to hit US$3.6 trillion in 2011

Global IT spend to hit US$3.6 trillion in 2011

Summary: Driven by strong telecom equipment demand and aided by favorable U.S. currency exchange rates, the worldwide IT expenditure is expected to grow 5.1 percent over 2010, Gartner reveals.

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TOPICS: CXO, IT Priorities
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Global IT expenditure is expected to amount to US$3.6 trillion in 2011, driven primarily by strong end-user demand for telecom equipment, according to a new Gartner report.

Released Friday, the report noted that 2010's worldwide IT spend grew 5.4 percent over 2009 to US$3.4 trillion. The upward trend is expected to continue, Gartner said, as it revised its forecast for 2011 from a year-on-year growth of 3.5 percent to 5.1 percent.

The positive forecast was partly driven by expected strong showings in the telecom equipment market, the report stated. Worldwide spend in this market will grow by 9.1 percent to reach US$1.65 trillion this year, as smartphone sales in mature markets and white box devices in emerging markets thrive.

Additionally, Gartner attributed currency exchange rate fluctuations to be a significant factor in the upward revision, as the forecast is based on the weakening greenback.

"Aided by favorable U.S. dollar exchange rates, global IT spending growth is expected to exceed 5 percent in 2010, but a similar level of growth, [despite our forecast], is far from certain, given continued macroeconomic uncertainty," said Richard Gordon, research vice president at Gartner, in the report.

He added that while the global economic situation continues to improve, the recovery is "slow and hampered" by a sluggish growth outlook in the important mature economies of the United States and Western Europe. Furthermore, there are growing concerns that key emerging economies might not be able to sustain their relatively high growth rates into the new year, he pointed out.

On the other hand, Gartner believes IT will continue to flourish in these uncertain times. Gordon pointed out that IT a fundamental enabler of cost reduction and cost optimization, investment in technology is seen increasingly as an important element in business growth strategies.

"We are optimistic about continued healthy spending on IT," he said.

Last month, IDC provided a more conservative forecast of US$1.6 trillion for global IT spend in 2011.

Software boosts Asia-Pacific showing
Gartner's latest report revealed that the Asia-Pacific region's end-users will contribute approximately US$652 billion of the overall IT spend in 2011. This represents a US$57 billion increase from 2010 and the research firm expects this growth in spending to continue for the next three years.

Zooming in on the figures, Gartner pointed out that software will see the biggest leap in end-user spending at 12.8 percent compared with the other categories such as computing hardware, IT services and telecom.

That said, telecom equipment continues to reign as the top area of expenditure overall in absolute terms. The sector will contribute US$460.8 billion to the region's overall spending in 2011, which is a hike from 2010's US$422.6 billion.

Last November, Gartner noted that Asian organizations are expected to increase their IT expenditures by 7.6 percent to US$312 billion. The rate of growth is slower than that experienced in 2010, though, where budgets rose by 10.6 percent, it said.

Topics: CXO, IT Priorities

Kevin Kwang

About Kevin Kwang

A Singapore-based freelance IT writer, Kevin made the move from custom publishing focusing on travel and lifestyle to the ever-changing, jargon-filled world of IT and biz tech reporting, and considered this somewhat a leap of faith. Since then, he has covered a myriad of beats including security, mobile communications, and cloud computing.

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  • Since when did Gartner give conservative estimates? (This is either very good news, or very bad news - here's hoping for the former of the two).
    scott2010au