Global biz IT spend to hit $2.7T

Despite challenging economic climate, businesses worldwide expected to invest US$2.7 trillion next year, as cloud, social networks and mobility become compelling forces for change.
Written by Eileen Yu, Senior Contributing Editor

Enterprises worldwide are projected to spend US$2.7 trillion on IT next year, amid further recognition that technology will play a key role in driving business growth.

According to Gartner, this spending would reflect a 3.9 percent increase over 2011 which would clock US$2.6 trillion by year-end. While the figure was lower than the projected 5.9 percent this year over 2010, the research firm noted the increased IT spend would come despite a challenging global economic landscape.

Gartner cited its senior vice president and global research head, Peter Sondergaard: "The days when IT was the passive observer of the world are over. Global politics and the global economy are being shaped by IT.

"IT is a primary driver of business growth. For example, this year 350 companies will each invest more than US$1 billion in IT. They are doing this because IT impacts their business performance," said Sondergaard, who was speaking at the Gartner Symposium/IT Expo held this week in Orlando, United States, which attracted an audience of 8,500 CIOs and IT decision makers.

The analyst noted that two-third of CEOs believed IT would make a greater contribution to their industry over the next 10 years than any prior decades.

He urged the need for IT heads to take the lead and "re-imagine IT" by embracing a "post-modern business" that is now driven by customer relationships and fueled by information, collaboration and mobility.

He added that this new era had brought with it "urgent and compelling forces", pointing to cloud computing, social networking, mobility and information. "These forces are innovative and disruptive just taken on their own but brought together, they are revolutionizing business and society. This nexus defines the next age of computing," Sondergaard said.

Cloud, social, data and mobility
According to Gartner, the move from traditional IT acquisition models to public cloud services was still in its early stages. It noted that US$74 billion was spent on such services last year but this accounted for only 3 percent of overall enterprise IT spend. However, it noted that public services would grow at 19 percent annually, five times faster than total tech spend, through to 2015.

"What supply chain models did to manufacturing is what cloud computing is doing to in-house data centers. It is allowing people to optimize around where they have differentiated capabilities," Sondergaard said.

He also pointed to social computing as an important growth area, noting that 1.2 billion people were now on social networks--a number that accounted for 20 percent of the world's population. He urged IT heads to start integrating social tools across their enterprise systems.

He also called for the deeper use of data analytics, where businesses would need multiple systems that integrate content management, data warehouses and specialized file systems, as well as data services and metadata, to offer one "logical" enterprise data warehouse.

Sondergaard explained: "Information is the oil of the 21st century, and analytics is the combustion engine. Pursuing this strategically will create an unprecedented amount of information of enormous variety and complexity."

Turning next to mobility, the Gartner analyst said the installed base of mobile PCs and smartphones last year outpaced that of desktop PCs. He added that while under 20 million media tablets were sold last year, this number was expected to spike to 900 million by 2016--or one for every eight person worldwide.

In addition, by 2014, the installed base of devices running lightweight mobile operating systems, such as Apple's iOS, Google's Android and Microsoft's Windows 8, would exceed the total installed base of all PC-based systems.

In the same year, private appstores would be deployed by 60 percent of IT organizations, Sondergaard revealed, noting that applications would also be redesigned, becoming context-enabled and with the inert ability to "understand" the user's intent.

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