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By | Timothy Prickett Morgan 30th March 2011 15:26

Gartner raises 2011 IT spending prognostications

Falling US dollar, fondleslabs save the day!

The wizards at market researcher Gartner have spent the past few weeks polishing their crystal balls, and now think the IT spending environment will be a bit better than they had originally expected.

The amount that Gartner has tweaked up its estimates for spending on enterprise hardware, software, services, and telecom is tiny - from a 5.1 per cent growth rate that Gartner projected back in early January to a 5.6 per cent rate in the most recent projection. But the commercial IT sector is so huge that a small change in per cent means a lot of money.

In this case, it means corporate IT spending on the order of $3,598bn instead of $3,406bn, or an extra $192bn. This is not chump change to any IT vendor.

As part of its most recent 2011 IT spending revisions, Gartner has taken a stab at adding corporate tablet sales to the mix for the first time; that is accounting for some of the change, but not anywhere close to all of it. Spending on tablets is, however, responsible for almost all of the expected growth in hardware spending in the latest Gartner forecast.

Gartner says that companies worldwide spent $9.6bn on tablets last year, and guesses that they will spend $29.4bn in 2011. If you back out those numbers from total hardware spending on IT-class gear (servers, storage, networking hardware, PCs, printers, and such), then hardware sales were only going to grow at around four per cent, to just under $380bn, in 2011. But when you add fondleslabs to the tab and the effects of the falling US dollar, hardware sales worldwide (as reckoned in US dollars) will grow by 9.5 per cent, to $409bn.

"The addition of media tablets, reinforced by an expected additional decline in the value of the dollar, accounts for the increase in top-line growth," said Richard Gordon, research vice president at Gartner, in a statement accompanying the numbers.

"Absent the addition of media tablets, the forecast would have slightly declined in constant-dollar terms; however, with their addition, there's virtually no change in underlying forecast growth at the level of overall IT."

Gartner forecasts that worldwide spending on tablet computers in the corporate space will grow at a compound annual growth rate of 52 per cent between now and 2015.

The prognosticators say that enterprise software spending in 2011 will rise by 7.6 per cent, to $255bn, while IT services spending will grow by only five per cent, to $824bn. Telecom spending (data and voice services together) is still the dominant part of the IT sector, with the aggregate corporate phone bill growing by 4.9 per cent, to $2,110bn.

Gartner is still trying to figure out the effects of the political turmoil in the Middle East and the earthquake and tsunami in Japan. "The Middle East share of global IT spending is approximately two per cent. While the political unrest affecting many countries in the region may well dent IT spending levels, any impact would be insignificant at the global level," Gordon said.

This forecast was mostly complete before the disaster in Japan, and Gartner is watching it carefully to see what effects might ripple through the IT economy. ®

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