Gartner Says IT Spending Growth to Be Tepid Through 2014
October 25, 2010 Timothy Prickett Morgan
If you were expecting the IT market to suddenly start expanding again like it was 1999, you are in for a splash of cold water in the face to wake you from that dream.
According to the prognosticators at Gartner, IT spending is on track to hit $2.4 trillion in 2010, up 2.4 percent compared to last year. This may not sound like a lot, but the IT industry is very large (especially when you toss in telecom costs, as this data does, alongside hardware, software, and services spending) and like a large body of water, it takes a long time to change its temperature even a little. There was definitely some ice on the hardware surface of the IT market in late 2008 and early 2009, but this has largely thawed.
However, Peter Sondergaard, a senior vice president at Gartner and global head of research, told attendees at the Gartner Symposium/ITxpo last week not to expect a lot of growth. The latest projections are for global IT spending to rise 3.1 percent in 2011, kissing 2.5 trillion, but Sondergaard cautioned that the next five years will be characterized by “timid and at times lackluster growth,” with global IT expenditures reaching only $2.8 trillion by 2014.
“Several key vertical industries, such as manufacturing and financial services, will not see IT budgets recover to pre-2008 levels before 2012 or 2013,” Sondergaard warned. “Emerging economies continue to be the locomotive of enterprise IT spending, substantially outpacing developed economies.”
If you want to be where the action is, then it is out there in the cloud and doing social computing. Probably things that many of you are allergic to or, more likely, you can’t envision your company getting involved in at this point given your long history in doing IT your own way.
“The rigid business processes which dominate enterprise organizational architectures today are well suited for routine, predictable business activities,” Sondergaard said. “But they are poorly suited to support people whose jobs require discovery, interpretation, negotiation, and complex decision making. Social computing–not Facebook, or Twitter, or LinkedIn, but the technologies and principals behind them–will be implemented across and between all organizations, it will unleash yet to be realized productivity growth, it will contribute to economic growth.”
Either that or it will end up being a colossal waste of time, as the Internet sure was for the first decade or so at many companies. Come on, admit how much time your company wasted on Internet development and how much time employees waste staring at their screens, looking like they are doing work. In the end, for lots of us out there who work for the Internet–notice how I did not say on it?–we have had to learn to avoid distractions and actually do our work. And in many cases, the Internet and the interconnections up and down the supply chain and between companies and customers have meant fewer people actually got to keep their jobs. That is real change and, of course, that is a far cry from making your company (instead of Google or Facebook or Amazon or eBay) some money with new social technologies. It may be that, in the end, what happens is much less attractive and a massive consolidation of computing power and business intelligence about everything we do ends up in very few hands and is largely beyond our control.
If you want to see some of Sondergaard’s presentation at the Gartner Symposium/ITxpo, you can check it out on YouTube here.