2011 IT Spending To Grow 7.1%

Worldwide IT spending is on pace to grow 7.1 percent in 2011, according to the latest quarterly spending outlook by Gartner, Inc. Analysts have revised overall IT forecast spending growth in U.S. dollar terms, up from their first quarter update, when they projected 5.6 percent growth for 2011.

“It is a bit surprising that we have not seen a more significant impact on our global IT spending forecast as a results of the Japan earthquake and tsunami, but despite widespread concerns about disruptions to the supply of critical components in the initial aftermath of the natural disaster, there has not been a dramatic impact on overall IT spending,” said Richard Gordon, research vice president at Gartner. “For 2011 as a whole, we expect Japan IT spending to be down in local currency, but we expect a positive growth trend to emerge in the second half of the year and continue into 2012.”

Global IT services is forecast to reach $846 billion in 2011, a 6.6 percent increase from 2010 (see Table 1). The computing and hardware segment is poised for the strongest growth with spending forecast to grow 11.7 percent in 2011.

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The migration to public cloud services is currently one of the hottest topics in IT, and Gartner’s latest forecast found that spending in this area is projected to grow four times faster than spending on overall IT. Worldwide public cloud services spending is forecast to total $89 billion in 2011, up from $74 billion in 2010. The market is forecast to reach $177 billion by 2015.

However, to put this growth in context, Gartner analysts said public cloud services spending was only about 2 percent of global IT spending in 2010, and by 2015 the level of spending on public cloud services will be less than 5 percent of the total spent on IT overall.

“Nevertheless, the emergence and adoption of cloud is an important trend, and in some markets, it’s already a significant factor,” Gordon said. “For example, at about $10 billion, software as a service (SaaS) already accounts for 10 percent of enterprise applications software spending, and by 2015 this share is expected to increase to close to 15 percent and to exceed $20 billion in annual spending.”