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November 16, 2009

Asia Pacific IT spending to make V-shaped rebound, says Gartner

Context aware computing, operational technology and pattern based strategy to be priority over next five years

By CBR Staff Writer

IT industry is exiting its worst year ever and will return to growth in 2010, according to IT research and advisory firm Gartner.

The company forecasts IT spending to be $3.3 trillion, a 3.3% increase from 2009. In Asia Pacific, IT spending is expected to grow by 5% to $515.6 billion in 2010.

Peter Sondergaard, senior vice president and global head of Gartner Research, said that this represented a fast V-shaped recovery for IT spending in the region.

“Emerging regions will resume strong growth. By 2012, the accelerated IT spending and culturally different approach to IT in Asia will directly influence product features, service structures and the overall IT industry. Silicon Valley will not be in the driver’s seat anymore.”

However, growth varies considerably by country, vertical market and IT sector. Software would post the strongest growth in Asia Pacific while telecommunications still represent the largest area of IT investment.

Segment wise, the computer hardware segment is expected to increase by 4.7% to $71.7 billion from 68.5 billion in 2009. Software segment is expected to increase by 10.2% to $22.1 billion, IT services by 9.3% to $56.9 billion, while telecom services segment is expected to rise 4.2% to $364.8 billion.

In Australia, the five-year outlook for enterprise IT spending is a compound annual growth rate of 1.3%, with total IT spending by Australian business to reach A$56.4 billion by 2013.

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Mr Sondergaard said that the three most-searched terms by Gartner clients on provide some clues as to the priorities of IT leaders around the world. The third most-searched terms were business applications such as ERP and CRM.

He said, three additional topics, business intelligence, virtualisation, social media that were important in 2009 will continue to dominate IT leaders’ agendas in 2010. Also, the three themes that will become important over next few years include context aware computing, operational technology and pattern based strategy.

Mr Sondergaard added: “While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012. 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.”

“We believe that 2010 will see increased focus on optimisation of business processes linked to software applications, what we call application overhaul. That is what will drive growth in the software segment.”

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