IT News Archives | Site Search | Advertise on IT Direction | Contact | Home

Global IT spending to hit over $3 trillion this year

Sep. 22, 2007

Add to del.icio.us     Digg this

According to Gartner, many executives remain optimistic enough about 2007 and 2008 that the research firm can accurately predict a fairly substantial increase in IT spending globally.

Last week, Gartner held its Symposium/IT-Expo in Orlando and released a research brief that said global IT spending is expected to surpass $3 trillion this year, up more than 7.9 percent compared to last year's levels.

Gartner's report also revealed that while it was expecting growth to slow down next year, analysts are nonetheless projecting sales would be up over 5.4 percent to hit $3.3 trillion in 2008.

On average, Gartner wasn't all rosy about the economy, and Peter Sondergaard, senior v.p. and global head of research, told the 6,000 attendees of the event that they should prepare two IT budgets for 2008-- one that assumes the marginal growth in IT spending that we have seen per year since the dot-com bust, and the other assuming that IT shops would have to reduce costs because of a possible recession.

Sondergaard added that "the business plans you had earlier in 2007 are probably not going to completely address the changed conditions of your business in November. Together with your business colleagues and your CEO, you are going to have to deliver new efficiencies, new innovations, and new ideas to sustain profitability and growth."

"IT will be core to many of those responses. Simply delivering internally focused savings isn’t going to be enough. You need to step up to the challenge of delivering new solutions to those critical business imperatives," said Sondergaard.

Analysts at Gartner reminded participants that IT spending is exploding in the developing economies, and now about 30 percent of total IT spending--more than $1 trillion--now happens outside of North America, Western Europe, and Japan.

This also means that more than $2 trillion of IT spending happens in the developed economies. Overall, IT spending on software, services and mobility has been increasing for many years, and Gartner expects this trend to continue in the years to come.

These three areas combined accounted for about 57 percent of total IT spending last year, or just over $1.63 trillion, and are expected to rise to 60 percent of spending next year, or $1.98 trillion.

This part of the market will grow by 21.5 percent from 2006 through 2008, compared to overall growth of 15 percent from 2006 to 2008 for the overall IT market.

On average, spending on hardware, storage, servers, PCs and other infrastructure like telecommunications is basically going to grow at a very modest rate.

Add to del.icio.us     Digg this

Source: Gartner