Gartner Raises IT Spending Forecast For 2010

Gartner has increased its IT spending forecasts for this year and now believes there will be an increase of 4.6 percent in 2010.

This increase will return IT spending to 2008 levels, a year ahead of what Gartner originally projected. All areas of the industry, including computing hardware, software and IT services, will see an increase in spending.

However, while the 4.6 percent figure (spending should reach $3.4 trillion for the year) is relatively modest, it is a significant gain after recession-riddled 2009, when spending declined 4.6 percent, Gartner analysts said in its release of the numbers.

The firm initially didn’t expect to see spending return to 2008 levels until 2011 – it earlier had projected an increase of 3.3 percent – but that has changed, according to Gartner analyst Richard Gordon.

“This sounds like quite an upper revision, but we do, in fact, see global economic conditions improving, and we have seen that for the past six months or so,” Gordon said in a video blog.

Gordon said that confidence among businesses was improving, which should help loosen the purse strings a bit. In addition, the new 2010 projection was helped by the weakened dollar compared to 2009, he said.

Gartner’s spending projections come days after the analyst firm said that CIOs will see their 2010 budgets remain relatively flat following a difficult 2009, when their allowed IT spending fell 8.1 percent.

Gordon said businesses will spend about 1.6 percent more in 2010 on computer hardware as they look to replace their ageing systems, particularly PCs. Hardware spending took a steep 13.9 percent drop in 2009.

“In the hardware space, we have seen significant interest in restocking,” he said, noting that the trend started in the second quarter of 2009 and is continuing into early 2010.

Businesses will increase spending in every area, including IT services, software and telecommunications.

Consumers will remain cautious on technology spending, Gordon said. Confidence is fragile, and the threat of layoffs remains. However, that should improve as the economy grows.

“As the years roll out, we will see the [consumer] spending pick up quite strongly as well,” he said.

Regionally, emerging markets – such as Latin America, the Middle East, Africa and Asia – which were least impacted by the recession, will lead the recovery, Gordon said. The recovery in IT spending in more established regions such as the United States, Western Europe and Japan will happen more slowly. Other areas, such as Central and Eastern Europe, will continue to lag.