IT spending likely to fall 5.2% worldwide, says Gartner

The worldwide IT spending is on pace to decline 5.2 percent this year. However, the IT industry will return to growth in 2010, with IT spending forecast to total $3.3 trillion, a 3.3 percent increase from 2009, according to research firm Gartner. In Asia Pacific, IT spending is expected to grow by five percent to reach $515.6 billion in 2010.

Peter Sondergaard, Senior Vice President at Gartner and Global Head of Research, said that this represented a fast V-shaped recovery for IT spending in the region. Emerging regions will resume strong growth, he said. By 2012, the accelerated IT spending and culturally different approach to IT in Asia will directly influence product features, service structures and the overall IT industry.

However, growth varies considerably by country, vertical market and IT sector. Sondergaard said that while software would post the strongest growth in Asia Pacific, telecommunications still represented the largest area of IT investment.

In Australia, the five-year outlook for enterprise IT spending is a compound annual growth rate of 1.3 percent, with total IT spending by Australian businesses to reach Australian dollar 56.4 billion by 2013. The vertical sectors with the highest IT spending growth would be communications (3.2 percent), healthcare (2.6 percent) and utilities (2.3 percent). While IT spending will increase next year, Gartner cautioned IT leaders not to be overly optimistic.

"While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," said Sondergaard. 2010 is about balancing the focus on cost, risk, and growth. For more than 50 percent of Chief Information Officers the IT budget will be zero percent or less in growth terms. It will only slowly improve in 2011, he added.

Sondergaard said that the three most-searched terms by Gartner clients on gartner.com provide some clues as to the priorities of IT leaders around the world. Cost remained the most-searched term during 2009, although it peaked in May, followed by cloud computing. "Next year will be the year when cloud computing moves from the discovery phase to small pilots, as part of organizations' desire to move from owned to shared IT," he said.

The third most-searched terms on gartner.com were business applications such as enterprise resource planning (ERP) and customer relationship management (CRM). "We believe that 2010 will see increased focus on optimization of business processes linked to software applications, what we call application overhaul. That is what will drive growth in the software segment," Sondergaard said.

Agencies