IDC Sees More Strong IT Spending in 2006

By Stan Gibson  |  Posted 2006-03-23 Print this article Print

Economic stability and emerging markets promise healthy growth this year, the IT market research firm says.

Fueled by purchases that accelerated in the second half of last year, worldwide IT spending in 2006 will cruise upward at a healthy rate of 6.3 percent, according to IT market research firm IDC. A report released today by International Data Corp., of Framingham, Mass., cited two main reasons for the trend: economic stability in the United States, Europe and Japan, and "continued robust growth" in emerging markets. Software buys will grow at a rate of 7 percent, while hardware and software purchases will increase by 6 percent, according to the report.
IBM predicts the top security threats of 2006. Click here to read more.
The 6.3 percent predicted growth rate for 2006 is down slightly from the 2005 rate of 6.9 percent. "IDC expects the upgrade cycle to weaken somewhat, leading to slightly weaker overall growth in 2006," said Juan Orozco, program manager of IT Markets and Strategies at IDC. "Were plateauing. The growth we predict this year is where we think it will be for the next three to four years," Stephen Minton, vice president of IDC Worldwide IT markets, said in an interview. But, he added, "Different markets are growing at different rates. Business intelligence, for example, is growing much faster." Minton said he does not expect a dramatic rise in IT spending from the anticipated release of Microsofts Windows Vista. In the United States, overall growth in 2006 will be 5.8 percent, IDC said, a slight decline from the 6.4 percent expansion of 2005. The strongest growth will be in network equipment, outsourcing services and system infrastructure software, including security tools, according to the report. The uptick in 2005 was the fastest growth rate since the feverish IT spending in the year 2000, Minton said, and spending was strong across all hardware segments: servers, PCs and networking gear. The healthy spending in 2005 led to better margins and revenue for systems vendors, he said. Although the services business is increasing overall, sending work to low-cost countries tends to keep a lid on spending growth, Minton said. The report predicts dramatic growth in IT spending in China, with a 14 percent increase, and India, with a 21 percent increase. Check out eWEEK.coms for the latest news, reviews and analysis on IT management from
Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel