Tech Spending Remains Strong, Despite Economic Risks and Volatility

According to the new International Data Corporation (IDC) Worldwide Black Book just released, IT spending increased by 5% at constant currency in 2011, despite the worsening economic situation in Western Europe and volatility in other regions. Emerging markets continued to lead the way, with tech spending in the BRIC countries (Brazil, Russia, India and China) enjoying another year of double-digit growth. Strong demand for mobile devices and software across most regions ensured a positive finish to the year, despite the impact of the hard disk drive (HDD) shortage on PC markets.

In U.S. dollar terms, the IT industry grew by almost 9% in 2011, but year-to-year comparisons could be difficult for U.S.-based IT vendors this year if currency conditions are less favorable. In constant currency, IDC projects another year of 5% growth for worldwide IT spending in 2012. Hardware and software spending are each forecast to increase by 6% (in constant currency), with 4% growth in IT services.

Strongest growth in 2011 came from smartphones (+46%), software (+6%) and disk storage systems (+6%). Businesses continued to invest in infrastructure upgrades, along with new software applications and mobile devices (including tablets). These positive trends are expected to continue in 2012, when enterprise spending on network equipment will also accelerate as many organizations invest in network upgrades to cope with the continuing increase in digital information, which will meanwhile ensure another positive year for the storage market. By the end of 2012, the PC industry will also return to positive growth.

The macroeconomic crisis in Europe has already had a severe impact on IT spending in that region. Overall IT investment was flat in 2011, with declines in spending on PCs, servers, storage, peripherals and enterprise network equipment. The recovery in Europe will be a long haul, with less than 1% growth this year and 3% in 2013.

In other regions, however, the momentum of 2011 is still evident in recent polls, which show continuing enthusiasm for tech investment amongst businesses and consumers. In the U.S., where IT spending increased by 7% last year, 2012 is likely to bring another year of solid growth (5%) driven by mobile devices, software and network equipment. Japan will see a return to positive growth, after the declines triggered by last year’s tsunami and earthquake disaster. IT spending in Brazil, Russia, India and China will be up by 9%, 11%, 16% and 15%, respectively.

More information on IT spending can be found at www.SupportIndustry.com