Global IT spending to total $US3.6 trillion in 2011

Gartner forecasts a 5.1 per cent increase from last year

In 2010, worldwide IT spending totalled $US3.4 trillion and this year spending will be $US3.6 trillion, according to a Gartner report titled 'Forecast Alert: IT Spending, Worldwide, 4Q10 Update'.

The research firm says that this amount represents a 5.1 per cent increase from 2010 and negates its previous forecast of 3.5 per cent growth.

Apparently, the IT industry is performing better than what Gartner expects and according to research firm's analysts, currency exchange rate fluctuations have continued to affect the U.S. dollar-denominated forecast.

Businesses experienced about 2.2 percentage point increase in IT spending growth in 2010, and out of this, about 1.6 per cent is attributable to the recent devaluation of the U.S. dollar against other currencies.

Macroeconomic uncertainty

Commenting on the forecast Richard Gordon, research vice president at Gartner said global IT spending growth is expected to exceed five per cent in 2010, aided by favourable U.S. dollar exchange rates.

However, a similar level of growth in 2011 is far from certain, due to continued macroeconomic uncertainty. Noting the improving global economic situation, Gordon said the recovery is slow and hampered by a sluggish growth outlook in the mature economies of the U.S. and Western Europe.

Gordon continued: "There are also growing concerns about the ability of key emerging economies to sustain relatively high growth rates. Nevertheless, as well as a fundamental enabler of cost reduction and cost optimisation, investment in IT is seen increasingly as an important element in business growth strategies. As the global economy repairs itself in the coming years, we are optimistic about continued healthy spending on IT."

Telecom equipment market

Readers of the Gartner quarterly IT spending forecast gain a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These predictions are meant to help Gartner clients understand market opportunities and challenges.

The newest report shows that the telecom equipment market is set to experience the strongest growth in 2011. Gartner says it had to revise its forecast due to strong sales of mobile devices in the third quarter of 2010, driven by smartphones in mature markets and white box devices in emerging markets, as well as stronger local currencies.

Although the computing hardware segment is forecast to grow 7.5 per cent in 2011, vendors face possible challenges, particularly in the area of PC growth. Gartner analysts said this is because of weak economic growth through the first half of 2011.

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