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By | ElectricNews.net 24th March 2006 10:14

Global IT spending to rise 6.3 per cent in 2006: IDC

Large ones all round

Worldwide spending on IT will rise by 6.3 per cent during 2006 as a result of economic stability in the US, Europe and Japan and robust growth in emerging markets.

That's according to a new forecast issued by the research firm IDC which predicts that growth will be strongest in the software market, where spending will grow by 7 per cent this year.

IDC also said it expects to see a 6 per cent rise in spending on hardware and services during 2006. "Last year, the intensifying infrastructure upgrade cycle drove IT spending to its fastest rate of growth since Y2K," said Stephen Minton, vice president of IDC Worldwide IT Markets. "Buyer activity really picked up in the second half of the year, contributing to improved margins and revenue for systems vendors and worldwide IT spending growth of 6.9 per cent for 2005."

IDC is predicting that while the upgrade cycle will weaken this year, there will be increased spending in key application areas such as business intelligence and content management. The research firm also expects that project-based spending will rise during the year.

In the US, overall growth in 2006 will be 5.8 per cent, a slight decline from the 6.4 per cent expansion of 2005. IDC said that spending on network equipment, outsourcing services, and system infrastructure software, including security tools, will fuel the rise in growth.

Overall IT spending in Western Europe is set to reach 6 per cent this year, while growth in Asia/Pacific (excluding Japan) will jump 9 per cent on the back of double-digit spending gains in China and India, where growth is expected to total 14 per cent and 12 per cent respectively.

"The global economy will remain stable and robust, with marginal changes in growth compared to 2005," said Anna Toncheva, program manager and economist, IT Markets and Strategies, IDC.

"Although the engines of acceleration will rotate towards Japan and Europe, China and the US will remain at the helm. Given the increased focus on productivity and innovation during the current capex cycle, IT investments will dominate replacement spending in gross investment in the developed economies."

Copyright © 2006, ENN

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