Businesses continued to invest in infrastructure upgrades, along with new software applications and mobile devices, including tablets.
IT spending increased by 5
percent at constant currency in 2011, despite the worsening economic situation
in Western Europe and volatility in other regions, according to the IDC
Worldwide Black Book. Emerging markets continued to lead the way, with tech
spending in the BRIC countries (Brazil, Russia, India and China) enjoying
another year of double-digit growth. Strong demand for mobile devices and
software across most regions ensured a positive finish to the year, despite the
impact of the hard disk drive (HDD) shortage on PC markets.
In U.S. dollar terms, the IT
industry grew by almost 9 percent in 2011, but the report warned year-to-year
comparisons could be difficult for U.S.-based IT vendors this year if currency
conditions are less favorable. In constant currency, IDC projects another year
of 5 percent growth for worldwide IT spending in 2012. Hardware and software
spending are each forecast to increase by 6 percent (in constant currency),
with 4 percent growth in IT services.
Strongest growth in 2011
came from smartphones (+46 percent), software (+6 percent) and disk storage
systems (+6 percent). Businesses continued to invest in infrastructure
upgrades, along with new software applications and mobile devices (including
tablets). IDC said these positive trends are expected to continue in 2012, when
enterprise spending on network equipment will also accelerate as many
organizations invest in network upgrades to cope with the continuing increase
in digital information, which will meanwhile ensure another positive year for
the storage market. By the end of 2012, the PC industry will also return to positive
growth, the report noted.
There are risks to the
outlook for 2012, mainly related to macroeconomic weakness in Europe, where IT
spending is still weak, said Stephen Minton, vice president of IDCs global
technology and industry research organization. In a downside scenario, things
could get much uglier in Europe and have a ripple effect through other regions.
But leading indicators in the U.S. have improved in recent months, and emerging
markets show no signs of a slowdown yet.
The macroeconomic crisis in
Europe has already had a severe impact on IT spending in that region, according
to IDC's research. Overall IT investment was flat in 2011, with declines in
spending on PCs, servers, storage, peripherals and enterprise network
equipment. The recovery in Europe will be a long haul, with less than 1 percent
growth this year and 3 percent in 2013.
Europe is going to be a
long, drawn-out recovery, said Anna Toncheva, program manager and economist in
IDC's global technology and industry research organization. The debt crisis
will take a long time to resolve, and there are numerous downside risks, which
could yet see the unraveling of the European single currency and, in the near
term, an escalation of the crisis due to sovereign debt defaults in peripheral
Eurozone countries.
In other regions, however,
the momentum of 2011 is still evident in recent polls, which show continuing
enthusiasm for tech investment among businesses and consumers. In the U.S.,
where IT spending increased by 7 percent last year, 2012 is likely to bring
another year of solid growth (5 percent) driven by mobile devices, software and
network equipment. Japan will see a return to positive growth, after the
declines triggered by last years tsunami and earthquake disaster. IT spending
in Brazil, Russia, India and China will be up by 9 percent, 11 percent, 16
percent and 15 percent, respectively.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
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