Gartner Symposium 2010: Enterprise IT spending expected to hit $US49.6 billion

Healthcare, utilities and the government sector are predicted to lead enterprise IT spending growth in Australia

IT spending among enterprise in Australia is forecasted to hit $US49.6 billion this year, following a strong 2010, while the Asia Pacific region is expected to rebound with a spending figure of $312.3 billion, according to analyst firm Gartner.

The forecast indicates enterprise IT spending in the region is expected to rebound this year with a 10.6 per cent growth, following a 1.3 per cent drop in spending in 2009. Additionally, IT spending growth is expected to jump 7.6 per cent in 2011 to reach $312.3 billion.

Speaking at the Gartner Symposium in Sydney, Gartner senior vice president and global head of research, Peter Sondergaard, said the economic downturn was responsible for the decline last year and this year's spending growth was a result of budget freezes and the replacement of ageing hardware.

"Growth in 2010 has been strong in due part to pent-up demand following budget freezes in 2009 and the need to replace ageing hardware," he said. " ... After some impact of the global financial crisis in 2009, growth in manufacturing and supply chain industries in China and India has picked up again in 2010."

In Australia, enterprise IT spending is expected to increase 10.8 per cent to $49.6 billion this year, with predictions of a relatively modest two per cent growth in 2011.

According to Gartner, the healthcare, utilities and government sectors will lead spending growth in Australia until 2014, where software will be the fastest growing segment with a forecasted annual growth rate of 10 per cent.

Australia is currently the second largest software market in the region after China, and is supported by consistent software maintenance revenue streams, strong vendor channels and service infrastructures.

When comparing industries in the region as a whole, software is in the lead with 11.3 per cent growth, followed by hardware at 10.1 per cent, IT services at 9.3 per cent, and telecommunications at 7.6 per cent.

However, despite the strong spending growth this year, Sondergaard said IT managers wills face financial challenges in 2011, with pressure from CEOs to reduce costs.

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