Storage and servers will help boost IT spending, says IDC

There's significant pent-up demand in the U.S. and Europe for infrastructure upgrades, capacity and bandwidth investments, according to IDC

Worldwide IT spending will grow by 4.6 percent this year, as enterprises look to upgrade storage, servers and networking equipment, according to market research company IDC.

While overall industry growth has cooled, some areas of tech spending are heating up as businesses in the U.S. and Western Europe begin to invest in overdue infrastructure upgrades, IDC said on Wednesday.

For example, IDC expects spending on servers and storage both to increase by 3 percent, after last year's declines of 4 percent and 0.5 percent respectively. The struggling PC market is showing tentative signs of stabilization, with improving commercial shipments, according to IDC's estimates.

This is also good news for other segments of the IT industry. Enterprise software spending remains strong and IDC forecasts services revenue will grow by 4 percent this year, compared to a 3 percent increase in 2013.

Businesses in mature economies are beginning to feel more confident about the economy compared to a year ago, and that is translating into new IT investments, according to Stephen Minton, vice president at IDC's Global Technology and Industry Research Organization.

"There's significant pent-up demand in the U.S. and Europe for infrastructure upgrades, capacity and bandwidth investments, and overdue replacement cycles. Many businesses will choose to fix the roof while the sun is shining in 2014," Minton said in a statement.

But all is not well from a global perspective. An economic slowdown in emerging markets is putting a damper on overall growth, according to IDC. Previously, IDC had expected that global IT spending would increase by 5 percent.

The PC market, while showing signs of bottoming out, continues to post year-on-year declines in revenue terms, and telecom infrastructure investment remains slow in many countries. Also, the explosive growth of mobile device sales has begun to cool from the breakneck pace of the last couple of years. The price erosion and commoditization that have resulted in cheaper equipment in many other hardware areas have spread to mobile devices, IDC said.

Still, one of this year's milestones will be half a trillion dollars in spending on phones and tablets alone. Another milestone will be more than US$400 billion on spent of software, according to IDC.

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Mikael Ricknäs

IDG News Service
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