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  • Continued Caution Sways 2012 Worldwide Spending Re-Forecast

    July 16, 2012 Jenny Thomas

    The analysts at Gartner continue to re-evaluate their worldwide IT spending predictions for 2012, and while the news is still better than last year, it’s not the economic recovery and bump in IT spending that we’ve all been hoping for.

    “While the challenges facing global economic growth persist–the eurozone crisis, weaker U.S. recovery, a slowdown in China–the outlook has at least stabilized,” said Richard Gordon, research vice president at Gartner, in a statement covering the latest IT spending update. “There has been little change in either business confidence or consumer sentiment in the past quarter, so the short-term outlook is for continued caution in IT spending.”

    So it sounds like everyone is taking a wait-and-see attitude before throwing any cash around, and it is that kind of hesitation that has made it difficult for Gartner analysts to pin down an IT spending outlook for 2012 since the beginning of the year.

    Back in April, IT Jungle reported that the Gartner analysts had downgraded their January projection of 3.7 percent growth to 2.5 percent growth for 2012.

    The latest forecast from Gartner has pushed those projections back up a half percent to a 3 percent increase over 2011 totals, putting worldwide IT spending is on pace to reach $3.628 trillion in 2012.

    While it’s not a huge change, even a slight upgrade really can’t be considered bad news in these economic times when any growth must be seen as a victory, However, it is enlightening to take a look at what’s causing Gartner analysts to continue to fiddle with their numbers. Along with this brighter revised 2012 outlook, Gartner also took the opportunity to correct its 2011 spending estimate across five broad areas in the IT sector, which offers some insight into why all these predictions are jumping around.

    Last summer, IT Jungle wrote about how Gartner was projecting that IT spending on computing hardware, enterprise software, IT services, telecom equipment, and telecom services would add up to $3.644 trillion in 2011. Then, Gartner revised that number in April of this year to $3.661 trillion, but now says spending in 2011 was lower than originally projected, totaling $3.523 trillion across computing and telecom, which is still a 7.9 percent increase from 2010.

    These 2011 revisions are the impetus behind the changing projections for 2012 spending, but the bottomline is a difference of $170 billion in revenues from Gartner’s original 2012 projections back in January.

    There are some bright spots for IT providers. In contrast to the rather lackluster growth outlook for overall IT spending, global telecom services will continue to be the largest IT spending market, with growth expected to come not only from net connections, but also in mature markets from the uptake of multiple connected devices, such as media tablets, gaming, and other consumer electronics devices. Spending on telecom equipment among service providers and telcos will jump 10.8 percent to $377 billion. The telecom services that run on these networks will bring in $1.686 trillion in revenues globally, which is 46.5 percent of the total IT budget worldwide but only creates an increase of 1.4 percent for 2012 after a 6 percent jump in 2011.

    Hardware spending, including sales of PCs, tablets, servers, storage, and networking gear, will amount to $420 billion in U.S. dollars, up 3.4 percent from the revised 2011 figures. Gartner also anticipates enterprise software spending, which includes code for personal devices as well as for servers and software sold over the cloud, will see 4.3 percent growth to $281 billion. IT services, which include systems integration, various kinds of clouds and hosting, business process outsourcing, break-fix tech support, and other kinds of services, will see only 2.3 percent growth this year, to $864 billion.

    And maybe to keep our spirits up, Gartner analysts threw in a glimmer of hope with a peek at 2013 guesstimates:

    The table shows that Gartner is counting on much higher spending on hardware and software in the data center and on desktop in 2013, slightly higher spending on telecom services, and very good growth on telecom hardware.

    IT services spending are also projected to rebound, up 4.8 percent to $905 billion globally, driven in part by big data engagements that have a big hardware and software component and by the rise of infrastructure and platform clouds.

    Gartner’s most recent IT spending forecast research is available on its website here.

    RELATED STORIES

    IT Spending Projections Crimped For 2012

    IT Spending Growth To Slow In 2012, Says Gartner

    Gartner, IDC Boost IT Spending Outlooks For 2011



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Volume 21, Number 26 -- July 16, 2012
THIS ISSUE SPONSORED BY:

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Table of Contents

  • Windows On The (2012 And Cloudy) World
  • IBM i Mobile Native Apps Coming On Strong
  • Used Software Scores A Legal Victory In Europe
  • Mad Dog 21/21: Up Close And Personal
  • One More Power Systems Roadmap For The Road
  • Continued Caution Sways 2012 Worldwide Spending Re-Forecast
  • IBM Launches Single-Socket PowerLinux Server, Tweaks Power Systems I/O
  • Scott Klement Joins Profound Logic Staff
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