Forrester Research's annual report on IT spending isn't great. It projects global business spending on IT goods and services in 2013 will top $2tn (£1.3tn), a scant increase of 2.3 per cent.
Despite the US economy gaining strength, the global numbers are dragged down by continued stagnation in Europe and an economic slowdown in China.
While the forecast is fraught with troubling signs, there's much good news for the channel, as services delivered by third-party IT providers and systems integrators actually make up the bulk of total IT spending.
A $1.7trn separate the spending forecasts published by Forrester and Gartner, which last month published its report that pegged global IT spending at $3.7bn. Both reports concur that IT spending will increase, but far slower than originally projected.
Gartner had pegged IT spending to increase 5.4 per cent at the beginning of the year, but has since revised its estimate to 3.3 per cent. Forrester is more conservative, believing that growth will be less than three per cent.
Forrester is quick to point out software makes up the biggest segment of IT spending, while tablets, whose sales are projected to increase 36 per cent this year, are among the fastest growing products.
However, the real story is how much businesses around the world are dependent on the value-add services provided by the channel.
According to Forrester, businesses will spend:
$411bn on IT outsourcing and hardware maintenance;
$389bn on IT consulting and systems integration services; and
$132bn on custom-built software applications.
Combined, these services segments make up nearly half of all IT spending around the world. The US, which remains the world's largest IT market here, is the source for 41 per cent of all IT spending.
While it's a rough approximation, that means the US services market open to the channel is roughly a $395bn addressable market opportunity.
For resellers, services providers, systems integrators, and so on, this should be welcome news.
With professional services sustaining margins greater than 60 per cent and managed services producing gross profits between 40 per cent and 60 per cent according to 2112 Group's "Profitability in the Channel" report, the spending not directly involving hardware and software has the potential of producing huge revenues and profits.
The sales of hardware and software - even commodity products - remain critical, however. Sales of servers, storage, business applications, middleware and OSes catalyse the consumption of managed, cloud and professional services.
On the global stage, the Europe and China economic troubles do worry IT vendors. However, as Forrester points out, the strengthening US dollar and continued domestic economic recovery will make for a good year in the American IT marketplace.
As part of our special editorial partnership, CRN is republishing this article from Channelnomics
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