IT Spending Recovering Claims Analyst Group

IT spending is rebounding in the wake of the global recession, with businesses spending on everything from PCs and servers to storage devices and networking equipment, according to market research firm IDC.

In numbers released on 24 May, IDC is estimating that worldwide IT spending will grow 3.8 percent this year, to $1.47 trillion.

Hardware vendors will be the biggest winners, with spending jumping 6.4 percent, followed by software at 3.1 percent and services at 1.5 percent.

Economic Rebound

IDC analysts said that businesses are showing enough confidence in the economic rebound to start spending on hardware. Emerging markets like China and India are seeing both businesses and consumers ramping up their IT spending, while in the United States, the federal government’s stimulus program has helped spur spending.

“Some [of the spending increase] is down to easy comparisons with the same period a year ago,” IDC analyst Stephen Minton said in a statement. “But it also reflects very real pent-up demand for infrastructure spending, including investment in solution such as virtualisation and information management. Just as capital spending on hardware is the first thing to fall in a recession, it’s also the first thing to come back up for air when the IT budgets are surfacing above water.”

However, IDC’s numbers come with a word of caution. Minton said some businesses are unsure about how sustainable the economic recovery is, and are holding back on spending for some projects and long-term contracts. “There is undoubted relief that capital spending and general IT budgets are up, but it’s also clear that some weak spots persist,” he said.

Western Europe Weak Spot

Western Europe, struggling with the economic crisis in Greece, is a key weak spot, according to IDC. Even before the issues of Greece and the euro came to the forefront, IT spending in the region was lagging, which isn’t a good sign considering it accounts for about at third of global IT spending.

Japan also is a concern. Improvements in exports hasn’t translated into a hike in internal spending or investment, the analysts said. IDC is predicting that IT spending in Japan will fall 2.2 percent this year.