IT Spending Forecasts Trending up in Latter Half of 2011

Ann All

IT spending is on an upward trend for the latter half of 2011, with both IDC and Gartner releasing forecasts that seem to indicate the technology market is bouncing back from a rough few years.


Gartner now expects worldwide IT spending to increase 7.1 percent this year for a total of $3.7 trillion, a slightly more bullish outlook than its first-quarter estimate that IT spending would grow 5.6 percent. Hardware will be the top spending category, with 11.7 percent growth, reports eWEEK.


Most publications, however, are zeroing in on Gartner's prediction that global spending on public cloud services will grow four times faster than spending on overall IT. Gartner expects spending on the public cloud to reach $89 billion in 2011, up from $74 billion last year.


The market will continue to grow, hitting $177 billion by 2015. Still, to keep it in perspective, spending on public cloud services will account for less than 5 percent of overall global IT expenditure in 2015. Software-as-a-service remains a strong performer. By 2015 SaaS will account for some 15 percent of enterprise application purchases, up from 10 percent today.


IDC offers different numbers. It pegged the public cloud market at $21.5 billion in 2010 and believes it wil reach $72.9 billion by 2015. (All analyst firms seem to break out market categories in different ways. I'm not sure how to explain what seems to be a huge difference in opinion here.)


As for overall IT spending, IDC says U.S. IT spending will increase 5.6 percent this year, outperforming a projected 3 percent growth in gross domestic product. IDC believes the two biggest areas of spending will be security products, which were mentioned by 31 percent of the 5,700 IT decision-makers it surveyed, and business analytics, which were cited by 19 percent of respondents.


It's no surprise that companies are focusing on security, in the wake of high-profile hacks of networks at Sony and other companies. The security issue is even more sobering considering all of the attacks that go unreported. IT Business Edge blogger Sue Marquette Poremba recently cited a survey of security professionals in four countries that found 90 percent of them had experienced at least one data breach in the past year and 59 percent had two or more.


Other surveys, like an IBM-sponsored one focusing on midmarket companies released earlier this year, show companies ready to spend more on customer-focused initiatives, which can involve collaboration and customer relationship management software along with analytics.

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