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September 11, 2012

Global IT spending to rise 6% in 2012: IDC

ICT spending in 2012 is anticipated to approach $3.8 trillion

By CBR Staff Writer

Despite ongoing economic uncertainty, the global spending on IT is expected to grow 6% in 2012, slight less than the 7% growth recorded in 2011, according to a new survey.

International Data Corporation’s (IDC) Worldwide Black Book Query Tool, Version 2, 2012 revealed that improved performance in software, storage, enterprise network and mobile device markets has so far counter balanced weaker trends in PCs, servers, peripherals and telecom provider equipment.

Due to the rise in strength of the US dollar, the IT spending growth will be only 4% representing a slump for US-based technology vendors, over the 2011 growth rate of 10.5%, IDC reported.

In 2012, the overall Information and communications technology (ICT) spending is anticipated to increase 5% to $3.8 trillion.

IDC Global Technology and Industry Research Organisation vice president Stephen Minton said in spite of economic uncertainty, which continues to inhibit enterprise investment in some tech segments, the continuing demand for tablets, smartphones, storage capacity and network -performance improvements actually outperformed expectations in the first half of the year.

"Software spending has been robust, even in regions where economic trends have been weakest, as businesses turn to software tools and applications as a means of implementing cost-reduction strategies," Minton said.

The US IT spending is expected to be 5.9% during the year, slump from 8.5% in 2011, while the launch of Microsoft’s Windows 8 in the fourth quarter is expected to enhance the PC market in 2013.

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Spending on IT in Western Europe region is expected to report 1% growth, which is a decline of 4.5% in terms of US dollars.

China is anticipated to witness 14% rise, while other markets, including India, Brazil and Russia will report similar rises.

The report also revealed that the overall global IT spending is anticipated to rise 6% in 2013 to $2.1 trillion, while ICT spending is expected to increase by 5% to $3.8 trillion during the same period.

"While this is a tough year for many IT vendors, the overall performance of the industry has been healthier than many expected in the first half of this year," said Minton.

"In particular, the strength of software spending seems to prove that many enterprises have unlocked significant productivity and efficiency improvements. If the economy avoids downside scenarios in the second half of the year, a PC upgrade cycle in 2013 should help to maintain this momentum."

According to an earlier IDC forecast, annual IT spending by Western European utilities is expected to cross $13 bn, recording a combined annual growth rate (CAGR) of 5.1% by 2016.

A Research and Markets forecast had earlier predicted that global IT services industry is expected to record a compound annual growth rate (CAGR) of 5% between 2012-2017 to reach $1.14tn.

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