Gartner predicts global IT spending to grow 3.7 per cent in 2012

By Sooraj Shah
05 Jan 2012 View Comments
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Worldwide IT spending is to hit $3.8tn (£2.4tn) in 2012, a 3.7 per cent increase on 2011 according to forecasts by research firm Gartner.

The impact of Thailand's floods on hard disk drive (HDD) production, uncertainty surrounding global economic growth and the on-going eurozone crisis have meant that the previous forecast of 4.6 per cent growth in 2012 was revised downwards.

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However, there was stronger growth (6.9 per cent) than the research firm expected (5.1 per cent) during 2011.

Detailing the extent of the reduction in production of Thailand's HDD discs, Robert Gordon, vice president of Gartner, said: "Thailand has long been a major hub for hard-drive manufacturing, both for finished goods and components.

"We estimate the supply of hard drives to be reduced by as much as 25 per cent (and possibly more) over the next six to nine months.

"Rebuilding the destroyed manufacturing facilities will also take time and the effects of this are likely to be be seen throughout 2012 and probably into 2013."

Gordon said that Gartner is advising businesses to be cautious in the short-term given the uncertain economic climate, and to bear in mind and prepare for all the potential fallout scenarios from the eurozone crisis.

Despite these HDD and eurozone woes, there should be healthy growth in IT markets within emerging economies.

"There is a slowdown in growth in the US and EU but in other parts of the world, such as Asia, Latin America, the Middle East and Africa, there is quite a strong economic growth of five to eight per cent.

"These are emerging markets and their economies are more immature from an IT perspective, but they afford lots of opportunities," he said.

According to the forecast, telecoms equipment spending is likely to see the strongest growth (6.9 per cent), followed by growth in the enterprise software market at 6.4 per cent.

Gordon said that certain sectors will see stronger growth because of strategic investments.

"Software in enterprise is a resilient sector. It is not as volatile as hardware, for example.

"There is a lot of strategic investment in software at the moment with companies buying applications and updating infrastructure rather than hiring new staff.

"The software business model also means that spending on a subscription basis is ongoing (as opposed to a one-off purchase), meaning it is not something that can be halted," he said.

He said telecom equipment makers should enjoy healthy sales thanks to strong fixed line and mobile infrastructure investments in emerging economies.

Gordon believes that a growing trend towards more agile business practices is another key reason for an increase in IT spending.

"Because of the financial crisis in 2009, IT in that timeframe was cut back because companies were looking for cost reductions across the business. However, since then companies have turned their attention to growth strategies and are positioning themselves for the new economy.

"So there's a lot of strategic investment for IT infrastructure and business applications as companies need to invest in technologies that enable them to understand their customers better. IT is a key enabler of business agility," he said.


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