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Technology: Gartner Revises Downward the IT Spending Outlook for 2012
IT is big business. In 2012, total global IT spending is expected to reach $3.7 trillion. That’s equivalent to about the size of Germany’s entire GDP. Big as it is though, the number is actually smaller than Gartner’s forecast made earlier in the year. That’s the result of the stronger-than-expected dollar so far this year and cutbacks being made globally within the government sector. Austerity measures in the Eurozone and cost-cutting in the US will cause government sector spending on IT to shrink this year and then again in 2013. These developments have caused Gartner to revise their predictions of IT spending growth for 2012 downward from the previous forecast of 3.7 percent to now just 2.5 percent.
Enterprise software is one area that is down. In 2011, Enterprise software grew at a rate of 9.2 percent — that number has shrunk to only 5 percent growth for 2012. IT services has also slowed substantially, from a growth rate of 6.5 percent in 2011 to just 1.3 percent expected growth for 2012.
Telecommunications is one area of higher growth. Driven from demand for mobile devices and faster networking, the telecommunications equipment sector is expected to grow 7 percent in 2012. Spending by small and medium sized businesses is also expected to be up, particularly in the area of enterprise software. Spending by SMBs account for about a quarter of all IT spending, and it will total $875 billion this year and reach $1 trillion by 2016.
Richard Gordon, research vice president at Gartner, said that “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.”
