This year, worldwide corporate IT spending took a nasty hit, clocking numbers not seen since the dot-com bust of ’01. All in, tech spending was down 6.9% in 2009, with the computer hardware market suffering particularly.
As such, a whack of companies, having not upgraded their systems for five or six years, are sitting on piles of IT-earmarked cash.
They might have spent it sooner, if Microsoft had unveiled something fancy to tempt them, but the multinational took a breather with major new application releases. And so that didn’t happen.
And they might have spent it again, but then the economy hit an ugly skid. And that didn’t happen, either.
But I read an article recently that suggests the tides are turning.
The recession is receding, bulbs of promise are starting a slow bloom everywhere and, by December 31, Microsoft will have released three major applications in the preceding year (Microsoft Exchange 2010, Windows 7 and Windows 2008 R2).
The year 2010, it appears, is poised for some serious IT spending.
To wit, research firm Gartner Inc. predicts a 3.3% rebound for the world’s IT sector for next year, to US$3.3 trillion, this after tumbling 5.2% in ’09. Gartner had earlier pegged global IT spending in 2010 at $3.23 trillion, up just 2.3%, but they bumped the numbers a few weeks back.
And although it won’t forecast a return to 2008 revenue levels until 2012, Gartner’s global head of research Peter Sondergaard predicts meaningful growth hallmarked by a shift from capital to operational spending in IT budgets in 2010. He cites business intelligence, virtualization and social media as key areas for imminent tech spending.
Gartner’s predictions on the specifics of the when and the what vary markedly by industry sector, but its research director says the majority of industries will enter a period of “sustained, positive growth” in 2011.
The trend is geographically variable. In the Asia Pacific region, for one, where the compound annual growth rate is higher than anywhere in the world, Gartner forecasts the enterprise software market revenue reaching US$22.1 billion in 2010, a surge of 10.2%.
Certainly from where I sit I see companies surfacing from the recession with a profound sense of awakening around their IT spends. Managers are starting to realize that they need to make room in their budgets for some fairly serious investments in equipment upgrades for the coming year.
More than that, they’re taking stock of their current cache of enterprise software, like ERPs and CRMs, and discovering the call for change rings loudly there, too. Many companies went ahead and switched up their ERPs in the Y2K panic years and now those systems are nine-plus years old. (Hard to believe the time that’s passed since we were all filling our bathtubs in anticipation of impending Armageddon.)
Sondergaard calls 2010 “about balancing the focus on cost, risk and growth.” Works for me.
Ladies and Gentlemen, start your engines.