IT spending seen surging by 3.3% to $3.3 trillion in 2010

IT spending seen surging by 3.3% to $3.3 trillion in 2010

Worldwide enterprise IT spending will struggle more with IT spending dropping 6.9 per cent. But the IT industry will return to growth in 2010 as IT spending forecast to total $3.3 trillion, a 3.3 per cent increase from 2009, said Gartner. While IT spending will increase next year, Gartner cautioned IT leaders not to be overly optimistic. “While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012,” Gartner Vice-President and Global Research Head Peter Sondergaard.
“2010 is about balancing the focus on cost, risk, and growth. For more than 50 per cent of CIOs the IT budget will be 0 per cent or less in growth terms. It will only slowly improve in 2011,” he added.

The computing hardware market has struggled more than other segments with worldwide hardware spending forecast to total $317 billion in 2009, a 16.5 per cent decline. In 2010, spending on hardware spending will be flat.

Worldwide telecom spending is on pace to decline four per cent in 2009 with revenue of nearly $1.9 trillion. In 2010, telecom spending is forecast to grow 3.2 per cent.

Emerging regions

Worldwide IT services spending is expected to total $781 billion in 2009, and it is forecast to grow 4.5 per cent in 2010. Worldwide software spending is forecast to decline 2.1 per cent in 2009, and the segment is projected to grow 4.8 per cent in 2010. On a regional basis, emerging regions will resume strong growth.

 “By 2012, the accelerated IT spending and culturally different approach to IT in these economies will directly influence product features, service structures, and the overall IT industry. Silicon Valley will not be in the driver’s seat anymore,” Sondergaard said.
Further, Gartner said that from a budget perspective, there are three important items that IT leaders must consider in the next fiscal:

*A Shift from Capital Expenditure to Operational Expenditure in the IT Budget — Concepts such as cloud services will accelerate this shift. IT costs become scaleable and elastic. CIOs need to model the economic impact of IT on the overall financial performance of an organisation.

*Impact of the Increased Age of IT Hardware — With delayed purchases of servers, PCs and printers likely to continue into 2010, organisations must start to assess the impact of increased equipment failure rates, and if current financial write-off periods are still appropriate. Approximately 1 million servers have had their replacement delayed by a year, says Gartner. That is 3 per cent of the global installed base. In 2010, it will be 2 million.

*IT Must Learn to Build Compelling Business Cases — 2010 marks the year in which IT needs to demonstrate true line of sight to business objectives for every investment decision. IT leaders can no longer look at IT as a per centage of revenue. CIOs must benchmark IT according to business impact.

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