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Gartner Trims IT Spending Forecast

Jul 6, 2010
By

David Needle






The outlook for IT spending on a global basis in 2010 isn't looking quite as rosy as research firm Gartner had thought earlier this year.

In a revised forecast issued Thursday, Gartner said it expects global IT spending to reach $3.350 trillion, an increase of 3.9 percent compared to 2009's $3.225 trillion. But just last quarter, Gartner had said it expected growth to hit 5.3 percent for the year, or $3.394 trillion.

Gartner said the main reason for the revision is the continued devaluation of the euro versus the U.S. that's been going on since the beginning of the year.


"The European sovereign debt crisis is having an impact on the outlook for IT spending," Richard Gordon, research vice president at Gartner, said in a statement. "The U.S. dollar has strengthened against the euro during the second quarter of 2010, and this trend will likely continue in the second half of 2010, which will put downward pressure on U.S.-dollar-denominated IT spending growth."

On the plus side, the forecast for spending on computing hardware remains strong with positive indicators on both the consumer and enterprise side. Gartner expects hardware spending to reach $365 billion in 2010, up 9.1 percent from 2009.

"The computing hardware sector continues to benefit from a healthy PC sector, which accounts for two-thirds of total spending in this area, and we expect PC shipments to remain robust throughout 2010 and 2011," Gordon said. "Consumer shipments will continue to be powered by strong mobile PC uptake, while professional shipments will be buoyed by a new replacement cycle and migration to Windows 7."

However, two key enterprise areas revised downward in the new forecast are IT services and enterprise software.

The jump in enterprise software spending is now only 3.1 percent for the year, down from Gartner's earlier forecast of 5.7 percent growth.

Gartner also dampened its growth forecast for the telecom sector. Spending on telecom equipment and services is now forecast to rise 3.4 percent for the year, down from the earlier estimate of 5.1 percent.

In developing the revised figures for IT spending, Gordon said Gartner recognized the global economic outlook appears stable but still vulnerable to "shocks" in key regions and industries. Given this uncertainty, Gartner expects IT buyers to especially focused on value in making purchase decisions.

"CEOs are targeting 2010 as a 'return to growth' year, and to enable growth strategies, CFOs expect increased IT spending," he said. "However, CIOs are seeing only marginal increases in budgets and are constrained to essential enterprise IT spending with discretionary spending still on hold. In the consumer sector, confidence is improving, although consumers are still wary of the threat of unemployment."

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.


Tags: telecom, enterprise software, IT spending, Windows 7, Gartner,
 

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