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?

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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: