IT spending set to grow by 5.3%

Worldwide IT spending is forecast to reach $3.4 trillion in 2010, a 5.3% increase from IT spending of $3.2 trillion in 2009, according to Gartner.

The IT industry will continue to show steady growth with IT spending in 2011 projected to surpass US$3.5 trillion, a 4.2% increase from 2010. In Asia-Pacific, IT spending is forecast to reach $549 billion, up 8.7% over 2009 levels.

Worldwide computing hardware spending is forecast to reach US$353 billion in 2010, a 5.7% increase from 2009. Robust consumer spending on mobile PCs will drive hardware spending in 2010.

Enterprise hardware spending will grow again in 2010, but it will remain below its 2008 level until 2014. Spending on storage will enjoy the fastest growth in terms of enterprise spending as the volume of enterprise data that needs to be stored continues to increase.

Near-term spending on servers will be concentrated on lower-end devices. Longer-term, server spending will be curtailed by virtualisation, consolidation and, potentially, cloud computing.

Computing hardware suffered the steepest spending decline of the four major IT spending category segments in 2009. However, it is now forecast to enjoy the joint strongest rebound in 2010, says Gartner.

Worldwide software spending is expected to total US$232 billion in 2010, a 5.1% increase from last year. Gartner analysts said the impact of the recession on the software industry was tempered and not as dramatic as other IT markets.

In 2010, the majority of enterprise software markets will see positive growth.

The infrastructure market, which includes all the software to build, run and manage an enterprise, is the largest segment in terms of revenue and the fastest growing until 2014.

The hottest software segments include virtualisation, security, data integration/data quality and business intelligence. The applications market, which includes personal productivity and packaged enterprise applications, has some of the fastest-growth segments.

Web conferencing, team collaboration and enterprise content management are forecast to have double-digit compound annual growth rates (CAGR), in the face of growing competition surrounding social networking and content.

Cost optimisation and the shifts in spending from mega suites to the automation of processes will continue to benefit alternative software acquisition models as organisations will look for ways to shift spending from capital expenditures to operating expenditures.

The worldwide IT services industry is forecast to have spending reach US$821 billion in 2010, up 5.7% from 2009. The industry experienced some growth in reported outsourcing revenue at the close of 2009, an encouraging sign for service providers, which Gartner analysts believe will spread to consulting and system integration in 2010.

Worldwide telecom spending is on pace to total close to US$2 trillion in 2010, a 5.1% increase from 2009. Between 2010 and 2014, the mobile device share of the telecom market is expected to increase from 11 to 14%, while the service share drops from 80 to 77% and the infrastructure share remains stable at 9% of the total market.

Worldwide enterprise network services spending is forecast to grow 2% in revenue in 2010, but Gartner analysts said this masks ongoing declines in Europe and many other mature markets as well as an essentially flat North American market.

Longer term, the global enterprise network services market is expected to grow modestly, largely on the back of growth in internet services, such as hosting.

Ethernet services will also grow, albeit at the expense of both legacy services and multiprotocol label switching (MPLS).