Gartner's IT spending forecasts over-optimistic

By Chris Middleton
06 Apr 2012 View Comments
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2012 worldwide IT spending is forecast to grow by 2.5 per cent year on year to $3.7 trillion, says Gartner – down from the company's previous forecast of 3.7 per cent growth this year.

Gartner said that it believes the reduced growth rate is principally to do with the strength of the US dollar relative to other currencies.

"Despite ongoing concerns about the global economic recovery — most notably around the resolution of eurozone sovereign-debt problems, worries about the potential for China's real estate 'bubble' to spill over and affect the rest of the economy, and rising oil prices — early signs in 2012 suggest that the global economic outlook has brightened a little," said Richard Gordon, research vice president at Gartner.

That said, Gartner's own figures show that spending in key sectors is falling away. For example, enterprise software is growing globally at five per cent, down from 9.2 per cent in 2011. IT services growth has slowed more dramatically to 1.3 per cent from 6.5 per cent in 2011.

Despite Gartner's optimism about economic recovery overall, these global growth rates – which take into account the still expanding Chinese and Indian economies – seem unlikely to be mirrored in the UK.

The government is by far the largest IT customer in the UK, and also by far the largest user of outsourced IT services in the whole of Europe. The majority of swingeing government cutbacks announced in Chancellor George Osborne's 2010 Comprehensive Spending Review have yet to be made. Indeed, some estimates say that 80 to 90 per cent of them are still outstanding. That can only have a significant impact on IT spending – and on the wider economy, where UK growth is flatlining.

With Cabinet Office Minister Francis Maude clamping down on IT suppliers' costs and a cap in place on IT spending, Gartner's optimism seems misplaced – although it does predict that IT spending in the government sector will contract “moderately” on a global basis in 2012 and 2013, driven by austerity measures in the eurozone.  

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