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Gartner raises worldwide IT spending estimate for 2011

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Stock ChartAnalyst firm Gartner Thursday raised its expectations for IT spending in 2011 compared to previous forecasts, but still expects spending growth to stop short of that seen last year.

Overall, Gartner said it expects to see worldwide IT spending grow 5.1 per cent in 2011, making technology a $3.6 trillion (U.S.) market. In 2010, the firm said that IT spending totaled $3.4 trillion, up 5.4 per cent compared to 2009. But then, what wouldn’t be an improvement from 2009?

And lest you put too much stock in Gartner’s growth predictions – please keep in mind that Gartner itself seems to second-guessing its own assertions. Consider the following statement in a press release from Garner research vice president Richard Gordon:

“Aided by favorable U.S. dollar exchange rates, global IT spending growth is expected to exceed 5 percent in 2010, but a similar level of growth in 2011 — while forecast — is far from certain, given continued macroeconomic uncertainty. While the global economic situation is improving, the recovery is slow and hampered by a sluggish growth outlook in the important mature economies of the U.S. and Western Europe. There are also growing concerns about the ability of key emerging economies to sustain relatively high growth rates. Nevertheless, as well as a fundamental enabler of cost reduction and cost optimization, investment in IT is seen increasingly as an important element in business growth strategies. As the global economy repairs itself in coming years, we are optimistic about continued healthy spending on IT.”

Putting aside that unbridled optimism, Gartner is expecting the biggest winners of 2011 to be very similar to those from 2010.

  • Telecom equipment continues to be the biggest grower, with the market expected to grow 9.1 per cent over 2010’s growth of 14 per cent, bringing it to a $465.4 million (U.S.) opportunity by the end of the year. This field saw the biggest upgrade from Gartner, noting strong sale of mobile devices in the third quarter of 2010 as well as improved local currencies in emerging markets.
  • Computing hardware growth is expected to dip from 8.9 per cent growth last year to 7.5 per cent growth this year.
  • Enterprise software, however, makes up some of that loss, raising growth from 6.1 per cent to 7.5 per cent over the course of the year.
  • In good news for solution providers, IT services is one of the big growers of the year, going from an anemic 2.5 per cent growth in 2010 to an expected 4.6  per cent growth in 2011.
  • Telecom services don’t fare as well as telecom hardware, with 2010 growth at 3.9 per cent, and the expectation that 2011 will see growth of 3.4 per cent.

It’s worth noting that Gartner had previously expected 2010 global IT spending to see 3.2 per cent growth, almost two points lower than its revised expectation of 5.4 per cent. The majority of that increase (1.6 points out of the 2.2 point jump) is accounted for by the recent drops of the U.S. dollar against other currencies, the company said.

The 2011 expectations are also up by comparable amounts, jumping to 5.1 per cent from the firm’s previously-stated target of 3.5 per cent.