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Gartner lowers 2012 IT spending forecast to 3.7 percent growth

The analyst firm cites Thailand floods, the Euro zone crisis and general economic uncertainty for the downgrade

By Chris Kanaracus, IDG News Service
January 05, 2012 10:05 AM ET

IDG News Service - Research firm Gartner announced Thursday that it has lowered its 2012 IT spending forecast, with spending expected to rise only 3.7 percent, rather than the previous forecast of 4.6 percent growth.

"Faltering global economic growth, the eurozone crisis and the impact of Thailand's floods on hard-disk drive (HDD) production have all taken their toll on the outlook for IT spending," Gartner vice president Richard Gordon said in a statement.

OUTLOOK: Virtual, mobile, social endeavors drive IT in 2011

Global IT spending in 2012 will now total US$3.8 trillion, Gartner said. Enterprise software, hardware, IT services and telecoms services and equipment will all see lower growth rates, it added.

The destruction caused by the floods in Thailand, where many hard drives are made, will have a serious impact on supply over the next six to nine months, Gordon said.

Economic turmoil in the Euro zone was another factor in Gartner's decision to downgrade. The firm anticipates that IT spending in Western Europe will drop 0.7 percent in 2012.

Gartner now predicts that hardware spending in 2012 will grow 5.1 percent to $424 billion, while enterprise software revenues will rise 6.4 percent to $285 billion. The categories grew 7.6 percent and 9.6 percent, respectively, in 2011.

Telecom equipment will see the strongest growth, rising 6.9 percent to $475 billion. That's only a slight drop from 2011's 7.7 percent growth rate.

But Gartner's revised forecast expects much weaker growth in telecom services, with a 2.3 percent rise to $1.74 trillion, down from the 6.1 percent jump in 2011.

IT services revenue in 2012 will also significantly lag 2011, rising 3.1 percent to $874 billion, according to Gartner. In 2011, IT services growth was 6.9 percent.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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