Worldwide IT spending to hit US$3.3trn this year

6 Jul 2010

Global spending on IT products and services is forecast to total US$3.3trn in 2010, up almost 4pc on last year, but down from the 5.3pc originally forecast by Gartner earlier this year.

Gartner says its decision to reduce its outlook is due to the devaluation of the euro versus the US dollar since the beginning of the year.

“The European sovereign debt crisis is having an impact on the outlook for IT spending,” said Richard Gordon, research vice-president at Gartner.

“The US dollar has strengthened against the euro during the second quarter of 2010, and this trend will likely continue in the second half of 2010, which will put downward pressure on US-dollar-denominated IT spending growth.

“Longer-term, public-sector spending will be curtailed in Europe as governments struggle to bring budget deficits under control during the next five years and to reduce debt during the next 10 years,” Gordon continued.

“Private-sector economic activity will also likely be hindered because of the direct impact of austerity measures on key government suppliers and the indirect impact caused by the ‘ripple effect.’ An effective policy response will be critical to stimulate investment in general and in IT in particular.”

Worldwide computing hardware spending is forecast to reach US$365bn in 2010, up 9.1pc from 2009 spending.

“The computing hardware sector continues to benefit from a healthy PC sector, which accounts for two-thirds of total spending in this area, and we expect PC shipments to remain robust throughout 2010 and 2011,” Gordon continued.

“Consumer shipments will continue to be powered by strong mobile PC uptake, while professional shipments will be buoyed by a new replacement cycle and migration to Windows 7.”

In software, IT services and telecommunications, the appreciation in the value of the US dollar, especially against the euro, has acted to dampen US-dollar-denominated growth in 2010.

2010: a return to growth year?

“Our latest IT spending forecast reflects the fact that the global economic outlook is stable but vulnerable to shocks in key regions and industries, which means that IT spending decisions are still scrutinised for value,” Gordon said.

“CEOs are targeting 2010 as a ‘return to growth’ year, and to enable growth strategies, CFOs expect increased IT spending.

“However, CIOs are seeing only marginal increases in budgets and are constrained to essential enterprise IT spending with discretionary spending still on hold. In the consumer sector, confidence is improving, although consumers are still wary of the threat of unemployment,” Gordon concluded.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years