IT spending predicted to grow 3.7pc in 2012

5 Jan 201256 Views

Global spending on IT is tipped to grow 3.7pc in 2012, according to Gartner. Total IT spending is forecast to reach US$3.8trn in 2011, up from US$3.7trn last year.

However, this forecast has been revised down from Gartner’s original forecast of a 4.6pc growth.

It says all four major technology sectors – computing hardware, enterprise software, IT services and telecommunications equipment and services – are expected to experience slower spending growth in 2012 than previously forecast.

Impact of Thai floods and eurozone crisis

“Faltering global economic growth, the eurozone crisis and the impact of Thailand’s floods on hard-disk drive (HDD) production have all taken their toll on the outlook for IT spending,” said Richard Gordon, research vice-president at Gartner.

The Thailand floods, that left one-third of the country under water, are having serious implications for businesses worldwide, particularly with computer and storage purchases.

“Thailand has been a major hub for hard-drive manufacturing, both for finished goods and components.

“We estimate the supply of hard drives will be reduced by as much as 25pc (and possibly more) during the next six to nine months. Rebuilding the destroyed manufacturing facilities will also take time and the effects of this will continue to ripple throughout 2012 and very likely into 2013.”

Although large PC OEMs will see fewer problems than others in the industry, no company will be wholly immune to the effects on the HDD supply chain. Gartner has reduced its shipment forecast for PCs, which has impacted the short-term outlook for the hardware sector.

The impact of HDD supply constraints on HDD and PC shipments in the first half of the year compound the cautious environment for hardware spending in general.

Telecom equipment spending is projected to show the strongest growth, with revenue increasing 6.9pc in 2012, followed by the enterprise software market, which will grow 6.4pc.

“With the eurozone crisis causing uncertainty for both businesses and consumers in Western Europe, we have adjusted our forecast, and we expect IT spending in Western Europe to decline 0.7pc in 2012,” Gordon said.

Support Silicon Republic

Table 1
Worldwide IT Spending Forecast (Billions of US Dollars)





Growth (%)




Growth (%)

Computing Hardware 404 7.6 424 5.1
Enterprise Software 268 9.6 285 6.4
IT Services 848 6.9 874 3.1
Telecom Equipment 444 7.7 475 6.9
Telecom Services 1,701 6.1 1,740 2.3
All IT 3,664 6.9 3,798 3.7

Source: Gartner (January 2012)

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