IT spending to hit $US1.51 trillion in 2010: IDC

Although IT spending has increased in 2010, there is still reason to be wary of instability in the economy

An IDC forecast has projected global IT spending to hit $US1.51 trillion in 2010, an increase on last year's figures as a result of economic recovery, but also highlights a lingering concern about an unstable global economy.

The forecast indicates that capital spending on new hardware is leading the way as businesses, governments, and consumers take advantage of a more stable economy to work off a “pent-up” demand for PCs, servers, storage and network equipment.

It notes that emerging markets are the front runners with economic recovery resulting in “a new wave of intense IT investment in countries such as China, India, Brazil, and Russia”, or the BRIC countries.

IDC vice president of worldwide IT markets and strategies, Stephen Minton, described the first half of 2010 as “robust”.

"PC shipments were strong, enterprise spending began to recover from the depths of the Great Recession, and consumers remained enthusiastic about new devices such as smartphones,” he said in a statement.

According to IDC, hardware spending will increase by 11 per cent to $US624 billion, while software and services spending is set to rise by 4 per cent and 2 per cent respectively.

Despite bouncing back this year with high growth rates, the figures are also a reflection on the dismal figures recorded in 2009 and the growth of demand for hardware and upgrades.

Although results have been optimistic thus far, Minton warned that there are reasons to be wary.

"Our surveys indicate that businesses are still cautious about committing to new, long-term IT projects, and are still anxious about the possibility of a double-dip recession. Decision-making cycles remain long, and many enterprises have contingency plans in place for the next 12 months which could see more projects suspended,” he said.

"On the one hand, [there is a] very real pent-up demand for new IT investment, which has driven the solid recovery in the first half of 2010 and which will hopefully continue into 2011. On the other hand, the potential loss of confidence in a global economy which remains extremely vulnerable to any further escalation of the European debt crisis or a deterioration in the U.S. stock market. The next three months will be crucial to determining which of these scenarios is more likely.”

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