Global IT spending surges in 2010

Global IT spending surges in 2010

The market research firm's 2010 report indicated that the IT industry registered its fastest growth rate since 2007 during the year gone by. Global spending on information technology was driven by pent-up demand for hardware upgrades and infrastructure investment after the financial crisis and global recession of 2009, as per the report.

Factoring in the telecommunications segment, the overall ICT (information and communications technology) market saw spending climb to almost USD 3 trillion, up 6 per cent from 2009.

Growth was driven by the need and ability of businesses to spend money to refresh their hardware and invest in technology infrastructure, according to the IDC.

"Like the global economy, the global IT industry performed better than expected in 2010," Stephen Minton, the Vice-President of IDC's IT markets and strategies group, said in a statement.

"With business profits and stock markets back into a cycle of growth, many organisations took the opportunity to make up for lost time by upgrading mission critical systems and infrastructure over the course of the year."

IDC found that demand for new hardware drove the rebound in 2010, as spending on computers, peripherals, storage technology, mobile devices and network equipment rose by 16 per cent to more than USD 661 billion, the fastest growth rate for hardware since 1996.

Breaking down the results, spending on storage products alone grew by 14 per cent, spending on servers by 9 per cent and spending on PCs by 11 per cent. Spending on software, though not as robust, also rose by 4 per cent, while spending on IT services grew by 2 per cent.

IT spending in the US rose by 6 per cent last year and should grow by another 5 per cent in 2011, as per the report. Developing economies were the force behind much of the growth in 2010 and should continue to be so in 2011.

Not counting Japan, the Asia/Pacific region's IT market climbed by 13 per cent last year and is expected to register a 10 per cent increase this year. IDC is also looking for double-digit growth from Central and Eastern Europe, Latin America and the Middle East and Africa.

IT spending in more developed economies, such as Western Europe, Japan, and Canada, will grow, but at slower rates, IDC said.

Ongoing high levels of unemployment will dampen the ability to invest heavily in IT products and services, though companies will still spend on certain projects and services, such as cloud computing, mobile devices and business analytics software.

"Like the global economy, the global IT industry performed better than expected in 2010," said Minton.

"With business profits and stock markets back into a cycle of growth, many organisations took the opportunity to make up for lost time by upgrading mission critical systems and infrastructure over the course of the year.

"While downside macroeconomic risks are still present, we entered 2011 on the back of a resounding rebound for the technology industry," he said. Spending on software and services, while lagging behind the pace of hardware investment, also returned to positive growth of 4 per cent and 2 per cent, respectively.

This is set to accelerate in 2011, as investment in new IT projects (including rapid adoption of cloud computing) begins to make up for an inevitable deceleration in the pace of capital spending by the end of the year.

The overall IT market will grow by 7 per cent this year, as per the IDC report, to USD 1.65 trillion with another year of double-digit growth for hardware spending (10 per cent), while the software and services markets will increase by 5 per cent and 4 per cent, respectively.

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