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Gartner projects global IT spending to rise 4.2 p.c. in 2013

V. Sridhar
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Global IT spending is projected to amount to $3.7 trillion in 2013, 4.2 per cent higher than the previous year, according to a forecast by IT research company Gartner, Inc. The forecast is based on more optimistic expectations made by Gartner since the third quarter of 2012, when it had expected IT spending to rise by only 3.8 per cent.

It is significant that the projected increase is contrary to the general refrain in the industry of sluggish market conditions in the short term and medium term. Gartner analysts confirm that the increase is more apparent than real because the increase is more on account of the projected gains in the value of foreign currencies versus the dollar. When measured in constant dollars, 2013 spending growth forecast is lower, at 3.9 per cent.

The forecast covers hardware, software, IT services and telecom markets. Commenting on the forecast, Richard Gordon, managing vice-president at Gartner, said, “Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth.”

“This uncertainty has caused the pessimistic business and consumer sentiment throughout the world. However, much of this uncertainty is nearing resolution, and as it does, we look for accelerated spending growth in 2013 compared to 2012,” Mr. Gordon added.

Not surprisingly, spending on devices, which include PCs, tablets, mobile phones and printers, is forecast to grow by significantly more than overall spending, by 6.3 per cent in 2013. This market is expected to reach $666 billion in 2013. Gartner, however, pointed out that even this had been scaled down from the earlier projection of $706 billion (growing at 7.9 per cent). Moreover, contrary to the hype about the growth of the market for devices with smaller form factors, Gartner expects the global market for devices to expand by only 4.5 per cent between 2012 and 2016.

Notably, the consultancy had earlier projected this market to grow at 7.4 per cent. “These reductions reflect a sharp reduction in the forecast growth in spending on PCs and tablets that is only partially offset by marginal increases in forecast growth in spending on mobile phones and printers,” it observed.

Mr. Gordon observed that the escalating “price competition” in the tablet space, especially with the dispersal of android-based devices and other low-priced options in emerging markets, has also impacted overall revenues. He observed that the fall in the average selling price of this class of devices has impacted overall global spending on not only tablets but PCs. Global enterprise software spending is forecast to total $296 billion in 2013, a 6.4 per cent increase from 2012. This segment is mainly be driven by markets such as security, storage management and customer relationship management.

Gartner expects the global telecom services market to be “predominately flat over the next several years”. However, it expects revenue from mobile data services to compensate for the decline in revenues from fixed and mobile voice services. By 2016, Gartner forecasts that revenues from mobile data services will represent 33 per cent of the overall revenues from telecom services, up from 22 per cent in 2012.

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