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February 2, 2010

Recession to hinder global IT spending growth in 2010

IT spending expected to increase marginally by 3% to $1.48 trillion

By CBR Staff Writer

Global IT spending is expected to increase by just 3% in 2010 at constant currency, continuing to feel the heat of global recession throughout 2010, according to a new forecast from IDC.

The research firm forecasts global IT spending to reach $1.48 trillion in 2010, still below $1.5 trillion recorded in 2008. IT spending is forecast to increase by less than 3% in the US.

IDC expects hardware spending to grow by 5% in 2010, while software spending and IT services spending to increase by 2% and 3%, respectively. In the hardware segment, global PC spending is expected to increase by 3%, up from the previous forecast of 2% growth, while the forecast for servers, storage, hardcopy peripherals, and network equipment have also been raised.

IDC said that the forcast for software and services spending reflects the lower value of contracts signed in the past year and continued caution toward new project-based spending in mature economies.

Geographically, the firm expects Asia/Pacific region to experience 6% growth in IT spending, following a 1% decline in 2009. China and India are both expected to increase by 11.5% and 13.5%, respectively in 2010. Following a decline of 7% in 2009, IT spending in Western Europe is expected remain flat in 2010, while in Central and Eastern Europe, the 20% spending crash of 2009 will be followed by 9% growth in 2010. IT spending in the Middle East and Africa will also return to 12% growth in 2010 after a 2.5% decline in 2009.

IT spending in Latin America will be up by 5% in 2010, with Brazil market returning to a more robust level of growth by 2011. North America IT spending will continue to be cautious and in contrast to the emerging markets and the SMB sector will struggle to fund new IT initiatives. In Canada, a subdued market is expected to produce a decline of 1% in IT spending in 2010, IDC said.

Stephen Minton, vice president of worldwide IT markets and strategies at IDC, said: Despite pent-up demand for upgrades and new applications following the deep spending cuts of the past year, economic uncertainty will combine with capital and credit constraints to inhibit spending in mature economies. The engine of global industry growth in 2010 will be in emerging markets, in particular China and India, where IT spending will recover much more quickly.

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Following a decline in overall tech spending of 4.5% at constant currency in 2009, IT spending will not fully recover from the global recession until sometime in 2011.”

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