IDC Lowers IT Forecast, Mobility Remains Hot

IDC notes that tablets and other mobile devices continue to grow as other hardware spending declinesA slowing economy in China has led to International Data Corporation () dropping its overall expectations for 2013, but the analyst firm still sees worldwide crossing the $2 trillion barrier for the first time ever this year, fueled largely by the growth of and .

IDC Monday said it now expects IT to grow at about 4.6 percent this year, down from its previous forecast of 4.9 percent, and down nearly a point and a half from last year’s mark of six percent growth. And the growth that remains is largely being fueled by . Excluding like smartphones and tablets, the firm expects the IT , software, and industry to grow by just 1.7 percent. Smartphone sales are expected to be up 18.5 percent this year, while tablets will increase by 39 percent. PC shipments continue to tumble, and IDC now estimates that PC sale will be down 7.2 percent this year – a sharp dropoff from their previous forecast of a 2.6 percent decline in PC sales. And much of the rest of the market isn’t doing any better.

“Average price declines in the server and markets continue to pressure margins and , while some of the pent-up demand which drove the 2010-2012 rebound has given way to a more subdued environment for capital spending,” said Stephen Minton, vice president of IDC’s Global Technology and Industry Research Organization. “There are still pockets of growth, but overall hardware investments are in a cooling phase, which will last until 2014 at the earliest.”

The company noted that tablet and smartphone sales have managed to prop up IT industry spending in the U.S., but that other segments, including other hardware products and IT services fields, have been declining.

Services are not immune from decline, as IDC dropped its forecast for services from 3.8 percent growth to 3.4 percent growth, with U.S. IT services growth expectations sheared from 3.7 to 2.9 percent. The company notes that software spending has “remained relatively resilient overall,” with growth at 5.5 percent, but that figure includes software as a service. Overall, the company expects “almost 10 percent” of annual software spending to be for cloud-based software by the end of this year.

The analyst firm pretty much dropped expectations worldwide, with spending expectations for Canada, Europe, Brazil, the Middle East and Africa, as well as most of the Asia/Pacific market.

“Only the U.S. bucked this trend somewhat, with PC sales a little stronger than expected in the second quarter, but not enough to offset the overall decline in shipments and average prices,” the analyst firm noted.

While China gets the headline-grabbing blame for the dropping forecasts, the country continues to grow faster than the rest of the world, with IT spend growing at 9.5 percent – fast, but down markedly from IDC’s previous expectation of growth at nearly 13 percent.

Where to Grow: Cloud, and BYOD

While some of the numbers presented by IDC are somewhat dour, none should be viewed as particularly surprising given the sharp turn away from PC primacy and towards mobile devices over the last three years. IDC’s numbers reinforce these , and also reinforce the areas where solution providers can grow their business in 2012 and beyond.

As non-PC mobile devices like smartphones and tablets continue to pick up steam against the PC, many solution providers will continue to find more problems in helping business customers – most of whom have set up their IT systems, procedures and policies for a PC-centric world – adapt to the new norm that is being thrust upon them. While most solution providers at this point have begun to shift their product and services offerings to include solutions like that help address these business challenges, IDC’s revised numbers show that many would be well-served to accelerate the growth and scale of their services offerings around the mobile-centric business.

Cloud is another area where most solution providers have begun to define their businesses, bolstering existing software or solutions offerings with cloud-based alternatives over recent years. Cloud reaching 10 percent of software spend this year is a fairly momentous mark, especially considering the low-cost nature of many cloud solutions. In spite of the low cost of acquisition for many cloud-based services, the channel opportunity continues to grow. A Microsoft-sponsored survey released at last month’s Worldwide Partner Conference in Houston noted that the software giant’s partners who had gone ”cloud-first” in their business acquired new customers more quickly than their peers, and also led the partner community in terms of key metrics such as gross profit, speed of growth, and revenue per employee.

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