Worldwide IT spending on the rise

Gartner claims that the IT industry is set to grow thoughout the year playing down fears of any double dip recession hitting sales.

Gartner thinks that IT spending will rise to $3.7 trillion in 2012, which is a 2.5 percent more than last year.

That is not to say things are great. Gartner’s previous forecast of 3.7 percent growth for 2012 and so this indicates that the industry is not doing as well as it initially thought.

However Gartner analysts say that the lower growth rate has more to do with the US currency than an actual decline in IT spending.

Lately the US dollar has been getting stronger and resulted in a reduced growth rate. But when looking at spending in constant US dollars, Gartner analysts said IT spending is on pace to increase 5.2 percent in 2012 which is more than its previous prediction of 4.6 percent.

Richard Gordon, research vice president at Gartner said that despite ongoing concerns about the global economic recovery early signs in 2012 suggest that the global economic outlook has brightened.

The dark clouds include the resolution of eurozone sovereign-debt problems, worries about the potential for China’s real estate ‘bubble’ to spillover and affect the rest of the economy and rising oil prices.

Gordon believes that IT spending in the government sector is expected to slide a little on a global basis in 2012 and 2013. This is mostly because of austerity measures in the eurozone, but there are also pressures on other governments to keep spending low.

He said that it is only this year that the impact of government budget cutbacks is being felt on IT spending in Europe. Gordon expected US government spending to be flat in 2012 before contracting in 2013.

In the small and midsize business market, which is a quarter of all enterprise IT spending, spending is forecast to reach $874 billion in 2012 and will grow to $1 trillion by 2016.

The main area of growth is going to be the midsized businesses were IT spending outperforms other sectors in each of the next five years. This is mostly driven by growth in spending on enterprise software.

One of the areas which also shows the strongest area of growth will be the worldwide telecom equipment market. Gartner predicts that this will reaching $472 billion in 2012, this is a 6.9 percent increase from 2011.

Gordon attributes this growth to the continued health of the mobile devices market and a more positive outlook for enterprise network equipment. There appears to be a lot spent on application acceleration equipment, network security, WLAN and Ethernet switches.