2010 IT spending outperforms in final analysis: IDC report

Stock ChartIn hindsight, maybe 2010 wasn’t so bad after all.

According to IDC’s Worldwide Black Book study, global spending on technology grew by eight per cent year-over-year in 2010, the fastest growth in the market since 2007. It’s worth noting, of course, that that growth is over the disastrous results of 2009 (a dip of four per cent worldwide), but still, it’s some cause for celebration.

The research firm says pent-up demand for hardware and infrastructure upgrades caused by nearly two years of businesses holding the purse strings extra-tight are the reason for the market growth, becoming a $1.5 trillion (U.S.) market for IT. With the edition of telecom services, the overall ICT (information and communications technology) market grew to $3 trillion in 2010, up six per cent.

As businesses dug themselves out of hunkering down for much of 2008 and 2009, hardware spending was the order of the day in 2010.  Overall, spending on computer systems, peripherals, storage, mobile devices and network equipment was up 16 per cent to $661 billion, which says is the fastest growth since 1996.

Among enterprise IT spending, storage led the way, up 14 per cent year over year, while PCs put in double-digit growth at 11 per cent and servers just missed that mark at nine per cent. Software and services did not fare quite so well – coming in at four per cent and two per cent growth respectively.

In a statement, Stephen Minton, vice president of IDC’s IT Markets and Strategies Group, said that much like the general economy, global IT spending outperformed expectations.

“Like the global economy, the global IT industry performed better than expected in 2010. With business profits and stock markets back into a cycle of growth, many organizations took the opportunity to make up for lost time by upgrading mission critical systems and infrastructure over the course of the year. While downside macroeconomic risks are still present, we entered 2011 on the back of a resounding rebound for the technology industry.”

So what’s on tap for 2011? IDC forecasts that software and services will get some of their luster back, as corporate IT spending moves from upgrading aging machines into new IT projects, most notably in the cloud computing sphere. Overall, the research firm expects the market to grow by about seven per cent to $1.65 trillion in 2011, with hardware spending growing about 10 per cent while software and services increase by five per cent and four per cent respectively. Along with cloud computing, major drivers for 2011 will include a continued expansion in numbers of mobile devices, and new software investments, particularly around analytics software.

The analysis firm said that Asia/Pacific, Central and Eastern Europe, Latin America, the Middle East and Africa will see IT spending expand by more than 10 per cent, while more established markets like Canada, the U.S., Japan and Western Europe will notch a “lower but sustainable rate of growth” of about six per cent for the year.

But like other prognosticators for 2011, IDC puts a big asterisk next to those stats and says that the global economy could still change things for better or (more likely) for worse. To quote IDC program manager and economist Anna Toncheva, also from the statement:

“The sovereign debt crisis in Europe may raise its head again, and we still lack sufficient visibility into many variables to be sure that a double-dip recession will not occur. However, the consensus opinion is currently that such a downturn is much less likely now than six months ago, and this continued economic stability will provide the foundation for another year of strong growth in the IT industry.”

The company will host a Web conference to discuss its expectations for IT spending in 2011 on February 17th.

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