Global IT Spending to Hit $3.6 Trillion, IDC Says

September 18, 2012 Alex Woodie

Backed by strong sales of business software in the first half of 2012, global IT spending is on pace to reach $1.9 trillion for the year, a 6 percent increase over total spending in 2011, IDC said last week.

IDC said that better than expected sales of software by businesses looking to boost efficiency, as well as strong showings in storage, networking, and mobile device sales, helped prop up the global IT market during the first six months of the year, as sales of PCs, servers, peripherals and telecom gear lagged.

IDC’s forecast was issued in constant currency terms. The relative strength of the U.S. dollar in the first six months of the year means that global growth for 2012 is on pace for a 4 percent rise if measured in actual dollars, down from a 10.5 percent increase in 2011 in U.S. dollars. The U.S. IT market, as measured in constant currency, is on pace to post a gain of about 5.9 percent, down from 8.5 percent growth last year.

Other western countries are also experiencing slower growth, with all of Europe on course for 1 percent growth (or a 4.5 percent decrease if measured in U.S. dollars). Japan is slowing down from a decent 2011, and is on course to post a 2 percent gain for the year (in constant currency).

In stark contrast are the growth rates of emerging economies, like China, India, Brazil, Russia, and South Africa, which are on course for IT spending rises of 14, 14, 14, 11, and 8 percents, respectively (in constant currency).

“In spite of economic uncertainty, which continues to inhibit enterprise investment in some tech segments, the continuing demand for tablets, smartphones, storage capacity and network -performance improvements actually outperformed expectations in the first half of the year,” IDC vice president Stephen Minton said.

“In particular, the strength of software spending seems to prove that many enterprises have unlocked significant productivity and efficiency improvements. If the economy avoids downside scenarios in the second half of the year, a PC upgrade cycle in 2013 should help to maintain this momentum,” Minton said.

The hopes and dreams of the global tech market may lay with the late October launch of Windows 8, which is expected to initiate increased sales of those old dinosaurs we call desktops.

Despite bright spots like the launch of Windows 8 and the new iPhone 5, don’t look for any big upticks in overall global spending on IT. IDC expects worldwide IT spending to post another 6 percent gain for 2013, to $2.1 trillion. When the IDC includes spending on telecom gear and services, it forecasts 5 percent of growth, to $3.8 trillion.