Gartner Forecasts Growth in IT Spending at 3% this Year
By Barry Levine / Data Storage Today. Updated July 09, 2012.
After a boost last year, the worldwide growth in IT spending will settle down to about 3 percent this year. That's a key takeaway from a new forecast by industry research firm Gartner.
The global IT spending forecast, which Gartner said is used to inform key technology decisions by more than 75 percent of the Global 500 companies, is derived from analyses around the world by more than 200 of the company's business and technology analysts.
'At Least Stabilized'
Richard Gordon, research vice president at Gartner, said in a statement that "the outlook has at least stabilized" for IT spending, given such global economic challenges as the Eurozone crisis, the weakness of the U.S. recovery, and a slowdown in China, among other factors.
"There has been little change in either business confidence or consumer sentiment in the past quarter," he said, "so the short-term outlook is for caution in IT spending."
The forecast does envision at least one "bright spot" that contrasts with overall, lackluster growth -- enterprise spending on public cloud services. That sector is expected to grow from $91 billion last year to about $109 billion this year, reaching about $207 billion by 2016.
The largest growth rate for IT spending is telecom equipment, which will see a 10.8 percent boost in spending this year over 2011. The largest segment in terms of dollars is telecom services, at $1.68 trillion. Gartner pointed to the continuing need for telecom services not only because of more Internet connections, especially in emerging markets, but also because of the boom in connected mobile devices.
Recovering from 2008
Gartner said that most of the cloud services spending is for business process as a service, but there is faster growth in such areas as platform as a service, software as a service, and infrastructure as a service.
Another area with continued growth potential is worldwide IT services, which will increase 2.3 percent from 2011, to $864 billion. The report noted that demand for such consulting services is expected to remain high, because of the continued complexity of technical environments, and because of the rise of "big data" and analytics.
We asked Laura DiDio, an analyst with Information Technology Intelligence Consulting, if the Gartner assessment matched her research and assessment.
Generally, she said, her assessment was similar, although she expects that an uptick in spending at the end of this year could potentially drive IT spending higher than the 3 percent overall growth rate. DiDio said she expected that there might be increased spending later this year in certain verticals, such as government.
She noted that the 18 months from the second half of 2008 through the first half of 2010 saw big cutbacks in IT spending, as the Wall Street crisis and resulting recession hit.
After that, DiDio said, "IT departments had to employ app and server virtualizations, cloud services," and other new technologies, but needed the personnel to do so -- which led to increased spending for staffing, consulting, and other costs. The boost in spending in 2011, she said, was the tail end of that boom, "and now it's settling down."