IDC: Hardware Spending To Cool, But Maintain
November 29, 2010 Timothy Prickett Morgan
Hardware spending is a leading indicator for overall IT spending, even after you adjust for Moore’s Law improvements, because the appetite for processing, memory, and I/O capacity has not in the past 40 years abated much. But spending does rise and fall with the economy, and even though late 2009 and through 2010 has seen some good growth, it doesn’t look like we are in the middle of a new dot-com boom.
I just happened to be browsing IDC‘s Web site when it randomly kicked out a hardware spending forecast for 2009 through 2014 in a daily graphic that the company puts up as a teaser for its paid-for data. Here’s what hardware spending globally looks like:
It would have been interesting to see what the data was from 1999 through 2014, or even from 2007 (when the Great Recession started) up through the 2014 projections. The growth rates in 2010 are declining because the recovery will be, for the most part, over as maybe the middle of next year. After that, we are back to relatively lukewarm hardware spending growth. While this is not great news, it sure beats 15, 20, or 30 percent declines, which some portions of the hardware racket stomached during the most recent downturn.
As The Four Hundred previously reported back in early September, IDC was projecting in its Worldwide Black Book that overall IT spending will rise by 6 percent, to $1.51 trillion, with hardware spending rising 11 percent to $624.4 billion.
I have never seen a hardware projection that went down three, four, or five years out. Everyone always forecasts growth and never sees a decline. And I am not about to make any prognostications. I think that virtualization and cloud computing for servers and storage will eat into sales as people share systems and don’t waste money buying their own for many applications, or resort to SaaS services where they don’t even know or care what the applications are running on. If server-based desktop virtualization takes off, this could more than offset declines in server and storage spending because of server virtualization and consolidation. I will say this much: if the economy doesn’t improve, people will spend less, and even that modest growth that IDC is projecting won’t happen.