Corporate IT spending to inch up
Monday, 12 April 2010

(CIOZone) By Michael Eggebrecht

Thanks in part to unseasonably strong first-quarter demand for hardware and a healthier global economy, worldwide IT spending could rise 5.3 percent this year, to $3.4 trillion from $3.2 trillion in 2009, predicts Gartner.

Spending on hardware took a major hit last year, falling 12.5 percent, to $333 million. But in 2010, Gartner expects that category to account for $353 million, good for a 5.7 percent increase. "Consumer PC spending will contribute nearly 4 percentage points of hardware spending growth in 2010, powered by strong consumer spending on mobile PCs," explained Gartner research director George Shiffler.

Enterprises will also find more money in their IT budgets for hardware, says the research firm, though it expects that hardware spending will remain below 2008 levels until 2015. "Professional PC spending will contribute just over 1 percentage point of spending growth in 2010 as organizations begin their migration to Windows 7 toward the end of the year," added Shiffler.

For enterprises, storage will see the fastest growth in spending. In the short term, says Gartner, spending on servers will mainly be relegated to lower-end hardware, with long-term server spending likely to be curtailed by virtualization and consolidation efforts, as well as potential movement toward the cloud computing model.

While the overall growth in IT is a large step up from 2009 -- when spending fell 4.5 percent -- much of that 5.3 percent increase is attributable to a weakening U.S. dollar. “IT spending in exchange-rate-adjusted dollars will still grow 1.6 percent this year, after declining 1.4 percent in 2009,” said Richard Gordon, research VP at Gartner.

Along with hardware, IT services will be the strongest area of growth, according to Gartner, rising from $777 million last year to $821 million. Growth in outsourcing revenues at the end of 2009 bode well for IT services providers, says Gartner, as well as consulting and system integration firms.

Software, meanwhile, is expected to grow 5.1 percent, from $221 billion to $232 billion, with the majority of enterprise software segments seeing growth, particularly infrastructure software. Gartner also pointed to virtualization, security, data integration, business intelligence and collaboration as hot areas.

Due to continued efforts by enterprises to move spending from capital expenditures to operating expenditures, alternative software models will continue to find success in 2010, according to Joanne Correia, managing VP at Gartner. "Because of this, vendors offering software as a service, IT asset management, virtualization capabilities and that have a good open-source strategy will continue to benefit,” she said. “We also see mobile-device support or applications, as well as cloud services driving new opportunities."

Comments (1)Add Comment
Dale Singh
...
written by Dale Singh, August 24, 2010
A lot of pressure is going to come from the security side with IT budgets being skewed in that direction for both risk management and compliance reasons.
Here's an interesting survey report on this subject

https://www.fortify.com/fortify/getform/reg/ATN_SecStudyIW_210Q3

Dale

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