News

Channel cautious about Gartner IT spend outlook

Microscope contributor

 

The soothsayers at Gartner have predicted that worldwide spending on IT will rebound next year but it is unlikely to reach pre-recession levels until 2012.

 

The IT industry is on track to decline 5.2% this year – 6.9% in the corporate space – and while worldwide spending is expected to grow 3.3% in 2010 to $3.3 trillion, Gartner warned IT leaders not to be overly optimistic.

 

“2010 is about balancing the focus on cost, risk and growth. For more than 50% of CIOs the IT budget will be 0% or less in growth terms. It will only slowly improve in 2011,” said Peter Sondergaard, senior vice president at Gartner. 

 

Computing hardware has been most impacted by the recession as customers delayed product refreshes; spending is forecast to fall 16.5% in 2009 year-on-year to $317bn and be flat in 2010

 

However CIOs need to ascertain the business risk of sweating assets, for example, around 1m server replacements were delayed in 2009 and another 1m are due to be replaced next year, which in total represents around 6% of the global installed base.

 

“If replacement cycles do not change, almost ten per cent of the server installed base will be beyond scheduled replacements in 2011…that will impact business risk. CFOs need to understand this dynamic,” said Sondergaard.

 

Global telecom spending is on track to decline 4% this year to $1.9tn, but is forecast to grow 3.2% in 2010. Similarly, IT services which is worth $781bn this year is expected to grow 4.5% next and software is projected to rise 4.8%.

 

However, convincing end-customers to part with their money will be no mean feat, “2010 marks the year in which IT needs to demonstrate true line of sight to businesses objectives for every investment decision,” said Gartner.

 

Areas that will continue to feature highly on CIOs’ agendas include business intelligence, virtualisation - which should be deployed across an entire infrastructure not just the data centre - and social media.

 

The hardware prediction issued by Gartner resonated with Simon Walsh, managing director at Computacenter but he felt the analyst was potentially a little too optimistic in its estimations of growth in software and services.

 

“I don’t expect there to be a substantial rebound of that magnitude,” he told MicroScope, “it will be industry and company specific, businesses are still rightly conservative.”

 

Terry Burt, CEO at 2e2, felt Gartner's projections were more positive rather than conservative but he reckoned there would be a recovery in services and improvements in hardware spending.

 

“When GDP starts to rise next year I expect spending on services to be better and I do expect some restoration in hardware,” he said.

 

Many projects are still on hold as the credit market has yet to free up said Logicalis European CEO Ian Cook, and though the market would remain flat for another six months it will bear the recessionary scars for a lot longer.

 

"All recessions change the market dynamic slightly and for the foreseeable future there has to be a compelling event for businesses to invest [in IT]," he said.

Related Topics: Desktop PCs, VIEW ALL TOPICS

Join the conversation Comment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.