IDC Says Global IT Spending Will Kiss $1.5 Trillion By 2010

Published: January 17, 2007

by Timothy Prickett Morgan

Having made their projections for IT spending in 2007, the analysts at IDC have put a high sheen on their crystal balls and looked out further to project what the IT budgets of 2010 might look like in the aggregate. And if things pan out as IDC expects, then IT spending in 2010 should come in at just under $1.5 trillion.

To be specific, IDC is projecting that between 2006 and 2010, IT spending worldwide will grow at a compound annual growth rate of 6.3 percent, rising from $1.16 trillion in 2006 to $1.48 trillion in 2010. The forecast that IDC put together was intended to give IT vendors advice on how to better create and position their products, but the report put out by the company did give some details on what kind of spending different areas of the IT market and different parts of the economy would see.

Over the five-year term, spending on software is expected to grow faster than the IT market at large, with $327 billion in spending on software of all kinds by 2010. That represents a compound annual growth rate of 7.7 percent over 2006's software revenues across all suppliers worldwide.

Hardware spending has been an up and down proposition for the past few years, and despite consolidation and virtualization efforts in both the storage and server markets, IDC is nonetheless projecting that spending on hardware will recover in the five-year term, reaching $562 billion in 2010. Increased spending on X64 servers, storage, and related peripherals as well as networking equipment will be the big drivers for hardware purchases in the coming years, particularly among home businesses, consumers, governments, and telecommunications companies and service providers.

On the services front, IDC expects services to still represent the dominant part of the global IT budget, with $587 billion in aggregate spending in 2010. But at a 5.8 compound annual growth rate, IDC expects the market for IT services to grow a little more slowly than the market as a whole. Governments, big banks and other financial institutions, and discrete manufacturers are expected to lead the way in IT services spending looking ahead.

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