Asia's IT spend to top US$312B in 2011

Companies in region to expand their IT budget by 7.6 percent this year, but growth is still slower than previous year's 10.6 percent, new report shows.

Asian organizations are expected to increase their IT expenditures by 7.6 percent to US$312 billion in 2011, though the growth is still lower than 2010 where budgets rose by 10.6 percent after a 1.3 percent dip in 2009.

According to new report from Gartner released Tuesday, Peter Sondergaard, senior vice president at Gartner, said growth in the Asia-Pacific in 2010 had been strong due in part to pent-up demand following budget freezes in 2009 as well as the need to replace aging hardware.

The report also noted that the weaker U.S. dollar significantly boosted valued growth rates, causing Asia's rebound in 2010 to appear strong.

In comparison, Australia's enterprise IT spending would inch up only 2 percent in 2011, Gartner revealed. The country saw a 10.8 percent growth in 2010 to hit US$49.6 billion, after a 5.3 percent drop in 2009, said Sondergaard who was speaking at the Gartner Symposium/ITxpo in Sydney.

In addition, India and China would not hold back on their IT spending, he said.

"After some impact of the global financial crisis in 2009, growth in manufacturing and supply chain industries in China and India has picked up again in 2010," he noted.

According to the Gartner analyst, Asia currently represents only 7 percent of the global IT services market, but will contribute 16 percent to worldwide market growth over the next four years.

Software to see fastest growth
Between 2010 and 2014, software would be the fastest growing segment--at 11.3 percent--in terms of IT spending in the Asia Pacific region, followed by hardware at 10.1 percent, IT services at 9.3 percent and telecommunications at 7.6 percent.

Gartner also identified the region's healthcare, utilities and education sectors as the top three vertical industries to see strong growth in IT expenses until 2014. This climb is due to government stimulus spending, the research firm said.

Sondergaard said: "Emerging economies [in Asia] continue to be the locomotive of enterprise IT spending, substantially outpacing developed economies." Asia's hardware spending, for example, will exceed North America's by 2012, he said.