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Will You Get Your Budget Back in 2010?

Jan 22, 2010
By

Andy Patrizio






Gartner today issued a report that projects worldwide IT spending will grow 4.6% this year, effectively erasing the 4.6% decline of 2009. However, that's still progress considering Gartner was projecting that spending would not return to 2008 levels until 2011.

The IT research firm said that spending in five major areas of IT—hardware, software, IT services, telecom and telecom services—will reach a combined total of $3.36 trillion this year, up from $3.21 trillion in 2009. Another market research firm, Forrester, made a similar prediction for a 2010 rebound.

"Last quarter, we did not expect to see IT spending levels recover to 2008 levels until 2011. However, with the upward revision to the current dollar forecast, we are projecting that global IT spending this year will approach the level seen in 2008," said Richard Gordon, research vice president at Gartner in a statement.


"Our updated forecast for IT spending to reach $3.4 trillion in 2010 is actually a year earlier than we expected to level our previous forecast update, reflecting a bounce back in underlying IT spending from the sharp drop in 2009," he added.

However, Gordon warned that much of the increase in the revised forecast is due to the depreciation of the U.S. dollar compared with last year. A falling dollar makes U.S. products, like IBM hardware and Microsoft software, cheaper to overseas markets, enticing them to order more American goods. But Gordon had some positive indicators as well, citing a rise in GDP, improving consumer confidence, increased availability of credit and companies finally spending due to "pent-up demand for new technologies."

Spending by Sector, Region

The renewed spending won't come evenly across sectors. Computer hardware spending, for instance, fell 13.9% in 2009 and is expected to grow only 1.6% this year. Software saw the smallest decline, down just 2.1% in 2009, but will grow 4.9% in 2010.

IT services will recover the most, up 5.6% in 2010 after a 3.5% drop in 2009, while telecom and related services will rise 4.7% after a 3.6% decline last year.

From a regional perspective, Gartner expects spending growth in emerging markets (with the exception of Central and Eastern Europe and some of the Gulf States) to lead the way, with spending forecast to grow 9.3% in Latin America, 7.7% in the Middle East and Africa and 7% in Asia/Pacific.

Recovery in Western Europe, the United States and Japan will start more slowly, with Western Europe increasing 5.2%, the U.S. growing 2.5%, and Japan increasing 1.8%.

Gartner surveyed 1,586 CIOs representing more than $126 billion in corporate and public-sector IT spending.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.


Tags: services, IT spending, research, hardware, Gartner,
 

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