Helsinki / New York: Global information technology (IT) spending will increase 5.3% this year to $3.39 trillion (Rs150.52 trillion), boosted by strong consumer demand for personal computers and a weakening US dollar, research firm Gartner Inc. said on Monday.
Forrester Research expects IT spending in the US alone to grow by 8.4% this year to $550 billion. That is up from its January forecast of a 6.6% increase compared with 2009.
“Following strong fourth-quarter (October-December 2009) sales, an unseasonably robust hardware supply chain in the first quarter of 2010, combined with continued improvement in the global economy, sets up 2010 for solid IT spending growth,” Richard Gordon, research vice-president at Gartner, said in a statement.
Gartner said nearly 4 percentage points of the growth will be the result of a projected decline in the value of the US dollar, with spending in exchange-rate-adjusted dollars to rise 1.6% this year, after a 1.4% fall in 2009.
Gartner sees worldwide software spending rising 5.1% to $232 billion, with the majority of enterprise software markets growing.
Global IT services spending is seen rising 5.7% to $821 billion.
“The industry experienced some growth in reported outsourcing revenue at the close of 2009, an encouraging sign for service providers,” Gartner said, adding it sees this trend spreading to consulting and system integration in 2010.
Forrester expects the worldwide technology market to grow by 7.7% in terms of the US dollar, to nearly $1.6 trillion. This is slightly lower than Forrester’s previous forecast of a 8.1% growth. That’s because the Greek financial crisis weakened the euro and strengthened the US dollar, Forrester analyst Andrew Bartels said.
Technology spending appeared to hit the bottom in the third quarter of 2009, and started to turn around late in the year, according to Forrester.
As expected, technology spending in the fourth quarter were “generally level with or slightly higher than the same period in 2008—clear evidence that the downturn is over and that renewed growth has started,” Bartels said in Thursday’s report.
Spending on computer equipment and software will be strong this year, with percentage growth in the double digits for both sectors, Forrester predicts.
Many businesses had put off replacements and upgrades during the economic downturn.
IT consulting services and communications equipment will each grow by about 7%. IT outsourcing will see slower growth, just under 4%, though it had been the only sector to grow last year.
A recent earnings report from business software company Oracle Corp. confirms Forrester’s outlook.
For the fiscal third quarter that ended in February, the company posted a 17% revenue increase to $6.4 billion, a sign that large companies are steadily boosting their technology spending.
Reuters & AP