Business IT spending crawls back to growth

IT spending set for robust growth this year, but the business hardware market will take four years to return to 2008 levels

On the up: worldwide IT spending is forecast to grow 5.3 per cent this year

Global IT spending is set to jump five per cent this year, but investment in the commercial world will not return to pre-recession levels for four years.

Research from Gartner predicts $3.4tn (£2.2tn) will be spent on IT across the world this year, up 5.3 per cent on 2009. Growth is expected to continue in 2011, with the research house predicting that the market will grow 4.2 per cent to exceed $3.5tn.

After slumping 12.5 per cent in 2009, spending on computing hardware is expected to spike 5.7 per cent this year to $333bn. Consumer spending on mobile PCs will provide much of this growth. Enterprise hardware spending will increase this year, but is not predicted to return to 2008 levels until at least 2014.

The IT services market will also grow 5.7 per cent to reach a worth of $777bn, according to Gartner. Software and telecoms spending are each projected to grow 5.1 per cent to $221bn and $1.89tn, respectively.

Gartner research vice president Richard Gordon claimed the global IT sector was in robust shape, but stressed that a weakened dollar was helping to paint a rosier picture.

"Following strong fourth quarter sales, an unseasonably robust hardware supply chain in the first quarter of 2010, combined with continued improvement in the global economy, sets up 2010 for solid IT spending growth," he said.

"However, it is important to note that nearly four percentage points of this growth will be the result of a projected decline in the value of the dollar relative to last year. IT spending in exchange-rate-adjusted dollars will still grow 1.6 per cent this year, after declining 1.4 per cent in 2009."

Technologies expected to enjoy rapid spending growth over the next couple of years include virtualisation, security and storage. Mobile devices are also on the up, and are projected to represent 14 per cent of the telecoms market spend by the end of the year, up from 11 per cent currently.

Kathryn Hale, research vice president at Gartner, said: "We continue to see a long-term recession hangover as a more cautious mindset continues as the norm among a lot of buyers who keep looking for small, safe deals where cost take-out is a key factor.

"In the face of that ongoing strong pressure to renegotiate contracts, and in the absence of equivalent pressure from stockholders, we believe vendors will generally choose to maintain margins over revenue growth."