Gartner: Cloud And Open Source Will Hit Hardware Sales

IT spending is set to increase this year helped by companies considering upgrading to Windows 7, but business could use cloud and open source projects to avoid large infrastructure projects.

In its “IT Spending Forecast, 1Q10 Update: Signs of Improvement” report, analyst Gartner said that worldwide IT spending will hit around $3.4 trillion (£2.1tr) in 2010 which marks a 5.3 percent increase from $3.2 trillion in 2009. Looking to next year, Gartner expects spending to pass $3.5 trillion.

Hardware spending down till 2014

Despite the overall growth, the analyst predicts that enterprise hardware spending will remain below its 2008 level until 2014. Storage will fare well in this period due to increasing amounts of data companies are faced with.

But according to Gartner spending on servers will be focused on lower-end devices in the short term, while in the long term companies will look to virtusalisation and cloud computing as alternatives to new servers.

Although larger hardware may be undermined by cloud computing and virtualisation, overall hardware spending will recover thanks to consumer spending on mobile devices and businesses migrating to Windows 7, Gartner believes.

“Computing hardware suffered the steepest spending decline of the four major IT spending category segments in 2009. However, it is now forecast to enjoy the joint strongest rebound in 2010,” said George Shiffler, research director at Gartner. “Consumer PC spending will contribute nearly 4 percentage points of hardware spending growth in 2010, powered by strong consumer spending on mobile PCs. Additionally, professional PC spending will contribute just over one percentage point of spending growth in 2010 as organisations begin their migration to Windows 7 toward the end of the year.”

According to a survey released by network management specialist Spiceworks earlier this year Windows 7 is seeing increasing adoption within the small to medium-size business (SMB) community, thanks to perceived improved user interface and better performance.

Companies are also continuing to avoid expensive services and software contracts thanks to the “hangover” from the global financial crisis according to Gartner. The analyst believes that IT purchasers are still focused on cost-savings which is helping software as a service providers and even open source specialists.

“Cost optimisation, and the shifts in spending from mega suites to the automation of processes will continue to benefit alternative software acquisition models as organisations will look for ways to shift spending from capital expenditures to operating expenditures,” said Joanne Correia, managing vice president at Gartner. “Because of this, vendors offering software as a service (SaaS), IT asset management, virtualisation capabilities and that have a good open-source strategy will continue to benefit.”

Earlier this month, the Computing Technology Industry Association (CompTIA) releases a report on technology business confidence which found that the number one priority for large and mid sized businesses is revenue generation.