October 21, 2009 – On the heels of the worst recorded year the IT industry, IT spending is expected to return to growth in 2010, according to research firm Gartner Inc.
Worldwide IT spending is now projected to grow 3.3 percent in 2010 with a forecast totaling $3.3 trillion, according to the market researcher's report titled "IT Spending 2010."
Worldwide spending is now on pace to decline 5.2 percent in 2009, an improvement over the 6 percent decline predicted by Gartner in July. With enterprise IT spending dropping 6.9 percent, Gartner is cautioning IT leaders to take the predicted rebound with a grain of salt.
Peter Sondergaard, Gartner’s global head of research, was quoted in a release to say that the market is not expected to return to 2008 revenue levels until 2012. “2010 is about balancing the focus on cost, risk and growth. For more than 50 percent of CIOs the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011,” he said.
Projected spending for the computing hardware market is expected to be flat in 2010 compared to 2009 spending, which is likely to settle around $317 billion -- a 16.5 percent decline from 2008. Worldwide IT services and software spending, however, are expected to recover from 2009 declines, both slated for projected segment growth higher than 4.5 percent in 2010.
Gartner highlighted three areas of importance for IT leaders to consider in the coming year: a shift from capital expenditure to operational expenditure, the impact of aging IT hardware and the need for IT professionals to create compelling business cases.
The report calls for emphasis on the economic impact of IT companywide, and CIOs need to model IT’s budget impact on overall financial performance. If current financial write-off periods are still appropriate, organizations should start to assess the impact of increased equipment failure rates. Finally, business leaders must benchmark IT budgets against overall business impact, rather than a percentage of revenue, the report emphasized.
Adrienne Baker is associate editor at Information Management. She can be reached at adrienne.baker@sourcemedia.com.
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