IT's Comeback for 2010 Built Around Recovery

By Andy Patrizio

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The end of the year means at least one certainty beyond holiday shopping and empty wallets: Predictions for the coming year. That's where the market research firm IDC comes in, with its forecast for 2010 built around assumptions of a return to growth next year.

Much of the report, IDC Predictions 2010: Recovery and Transformation authored by IDC's chief analyst Frank Gens, can be summed up in a word: recovery.

IDC predicts a growth rate of 3.2% in the IT industry in 2010, with a return to 2008 spending levels (the period before things went off the rails) to about $1.5 trillion. Emerging markets will lead the way, with spending by the BRIC countries (Brazil, Russia, India and China) growing 8% to 13%.

In particular, the telecommunications market will see improving stability worldwide and post 3% growth. Public networks will continue the aggressive move to fiber, 3G and 4G wireless. However, IDC thinks 4G will be over hyped, while mobile device makers, wireless carriers and cloud services providers will be forced to team up to provide mobile computing devices with consolidated, built-in Internet connectivity and services. Meanwhile, the researcher expects the FCC to begin regulating new VoIP services like Google Voice.

Spending for New Tech

For IDC, such developments will pave the way for a second key term: "transformation". The research firm believes that businesses will emerge from the technological coma has paralyzed global spending and begin spending on the new technologies vendors have been crowing about in recent years. One of those new technologies is Cloud computing, which IDC predicts will expand and mature as a strategic battle for Cloud platform leadership erupts. There will be new public Cloud hotspots, private Cloud offerings, Cloud appliances, and offerings that bridge public and private Clouds.

Smartphones and mobile Internet devices will remain a hot arena as well, with much of the interest likely to continue centering around Apple's iPhone in two ways: further growth in the mobile app market, and new efforts by competitors trying to knock Apple off its perch. In particular, IDC predicts the number of applications in Apple's App Store will triple to 300,000. It also said it expects Apple to release the rumored "iPad" tablet PC-style device that has been the subject of buzz for months.

Apple's App Store isn't the only mobile application player likely to grow, IDC said. The Google-backed Android mobile OS will see a five-fold increase in its available apps next year, according to the researcher. In part, that's because Android apps represent a far smaller field with more room for growth. All in all, IDC expects more than one billion people worldwide will access the Internet via mobile devices like smartphones and tablets like the iPad.

In addition to the Cloud and mobility, IDC anticipates rising energy costs and pressure from the Copenhagen Climate Change Conference happening this month will make sustainability a source of renewed opportunity for the IT industry in 2010.

Also, the company said it expects business applications to undergo a fundamental transformation, becoming increasingly fused with social and collaboration software and analytics creating what it called "socialytic" apps that challenge the current market leaders in enterprise apps.

All that renewed activity will have at least more critical implication, IDC said: The tech sector's transformations will drive a frenetic pace of M&A activity in the coming year.

Recovery almost certainly won't be limited to the IT industry, IDC said, but it added that other sectors emerging from the recession will be looking to IT as an increasingly important lever for their own transformation agendas.