Research firm Gartner predicts that worldwide enterprise software spending will increase through 2014. Despite that increase, though, North American spending is expected to slow by the end of 2010.
The worldwide market for enterprise software will increase
over the next year, as businesses begin to refresh their hardware and software
in the wake of the massive global recession. That prediction, in a Sept. 20
research note from Gartner, also suggests that enterprise-software spending in
North America will lose momentum in the second half of 2010-yet another sign
that the economic recovery could be a drawn-out affair.
"After declining 2.6 percent in 2009, the worldwide market
for enterprise software is recovering well with signs of continuing growth on
the horizon," Joanne Correia, managing vice president for Gartner, wrote in a
Sept. 20 statement. "Aging systems, as well as greater demand for security and
aligning software with business requirements, are key decision factors for end
users increasing their spending within the infrastructure software market."
Enterprise software spending in North America will hit
$110.8 billion this year, Gartner estimated, on its way to reaching $143.6
billion in 2014. That represents a significant increase from 2009, when
enterprise software sales totaled $102.1 billion.
However, the firm also predicted that growth would slow
through the end of this year.
"These earnings were driven primarily by pent-up software
demand, and with that demand having been mostly satisfied, somewhat slower
growth is expected for the latter half of 2010," Colleen Graham, research
director at Gartner, wrote in a Sept. 20 statement. "A loss of momentum and
general economic weakness will drive some organizations to exercise caution in
end-of-year software purchases. However, despite these challenges, key markets
such as virtualization, operating systems and security are expected to finish
the year with double-digit growth."
Gartner's research note predicts that Western Europe will
experience a slow-motion rebound in enterprise-software spending, while
Asia/Pacific enjoys "the fastest growth in software revenue of all the regions
in 2010." Overall, the firm predicts 2011 revenues for the enterprise-software
market at $246.6 billion, climbing to $297 billion by 2014.
numbers seem to fit with predictions from both Gartner and Forrester that
worldwide IT spending, after suffering steep declines in 2009, would
rebound in 2010. During the recession, all segments of the IT industry
experienced declines, with the hardware segment being hit particularly hard.
Software, IT services and telecommunications also experienced significant, if
somewhat shallower, dips in spending.
In another positive sign for the IT industry, trade
organization TechAmerica reported 30,200 technology jobs added to the economy
in the first six months of the year. TechAmerica's report used data
provided by the U.S. Department of Labor's Bureau of Labor Statistics. Those
areas adding jobs included software services (14,200), technology services
(29,700), and technology manufacturers (9,100).
"We have weathered the storm better than most," TechAmerica
president and CEO Phil Bond wrote in a statement. "From its position embedded
in every other industry, technology remains the best hope for driving robust
recovery across the economy. America can only realize the full promise of an
innovation recovery with smarter public policies focused on developing and
attracting the best talent, investing in research and development, and growing
and securing our information infrastructure."
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.