Businesses rein in spending on hardware and software

Businesses are reining in spending on hardware and software amid continued uncertainty in the global economy, according to analyst Gartner

Businesses are reining in their spending on hardware and software amid continued uncertainty in the global economy.

Analyst group Gartner has revised down its forecast for spending on hardware and software, despite overall growth in IT investment over the year.

Richard Gordon, research vice-president of the analyst group, said businesses are taking a cautious approach to upgrading their infrastructure amid uncertainty in the Eurozone, the US and China.

“There is continued caution about spending in the economic environment. Until we get some strong leadership in Europe on how the crisis is going to be resolved, both businesses and consumers are going to be cautious,” he said.

Overall IT spending is expected to grow by 3% from $3.5trn to $3.6trn worldwide between 2011 and 2012.

But Gartner has revised down its forecasts for growth in spending on PCs from 4% to 2%, and spending on software from 5% to 4.3% in 2012.

Read IT-focused advice from Gartner on the Euro crisis

Spending on PCs, mobile devices, ultramobiles and tablet computers will be lower than expected, said Gordon.

The situation is unlikely to change until there is more certainty about the economic future of the Eurozone.

“Businesses need clarity. The solution to the Eurozone crisis is not clear yet. We get fudge after fudge,” he said.

On the positive side, business spending on cloud computing is expected to grow over the next five years from $91bn worldwide in 2011 to $207bn by 2016.

However, cloud continues to account for only a small proportion of overall IT spending, and is expected to rise from 2% to just 5% of overall IT investments by 2016.

Companies are turning to big data and business analytics to gain a competitive advantage from the data they collect on their customers.

Telecoms services accounts for the biggest share of total IT spending, with growth coming from the roll-out of mobile devices in emerging markets.

“We are past the batten-down-the-hatches mode. If the Eurozone does not improve, we may come back to that, but [for now] a lot of companies are doing well and are making investments,” he said.

Spending forecasts (billions) 2011 spending 2011 growth 2012 spending 2012 growth 2013 spending 2013 growth
Computing hardware $404 7.4% $420 3.4% $448 6.6%
Enterprise software $269 9.8% $281 4.3% $301 6.9%
IT services $845 7.7% $864 2.3% $905 4.8%
Telecoms equipment $340 17.5% $377 10.8% $408 8.3%
Telecoms services $1,663 6% $1,686 1.4% $1,725 2.3%
All IT $3,523 7.9% $3,628 3% $3,786 4.4%

Source: Gartner (July 2012)



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