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IT spending to grow

12 Nov 09

It has been the worst year ever in terms of IT spending, according to research firm Gartner, but shifts in purchasing patterns spell bluer skies for the coming year.

After a decline of 5.2% in IT spending worldwide, and a 6.9% decline in worldwide enterprise IT spending, the future looks brighter. The IT industry will return to growth, with 2010 IT spending forecast to total $3.3 trillion, a 3.3% increase from 2009. But, Gartner warns, don’t be over-optimistic as the strongest growth is likely to be in the emerging regions, responding directly to their specific needs and “Silicon Valley will not be in the driver’s seat anymore”.

“While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012,” said Peter Sondergaard, Senior Vice President at Gartner and Global Head of Research. “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.”

Gartner says there are three particular areas that you must consider in 2010. Firstly, the shift from capital expenditure to operational expenditure in the IT budget will continue, with services such as cloud computing accelerating the shift. CIOs need IT costs to become “scalable and elastic” in order to mirror the overall financial performance of an organisation.

Secondly, existing hardware is likely to be used for longer, with delays to purchases of servers, PCs and printers likely to continue into 2010. This means the spotlight will fall on increased equipment failure rates and if current financial write-off periods. Approximately one million servers have had their replacement delayed by a year; that is 3% of the global installed base. Gartner expects this number to rise to at least two million in 2010.

And finally, those selling IT or researching IT purchases must learn to build a business case. Gartner says IT leaders can no longer look at IT as a percentage of revenue and CIOs must benchmark IT according to business impact.
Added to these three topics, business intelligence, virtualisation and social media will continue to be important in 2010. Sondergaard also highlighted three new areas of importance in the coming year:

• Context-aware computing: leveraging information about the end user to improve the quality of the interaction
• Operational technology: devices, sensors, and software used to control or monitor physical assets and processes in real-time to maintain system integrity
• Pattern-based strategy: implementing a framework to proactively seek, model, and adapt to leading indicators from patterns in the marketplace.

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