Gartner cuts 2012 IT spending growth forecast by 1/3rd

Are you ready to grab your share of the dwindling 2012 IT budget increases?


The predictions for solid growth might have gotten ahead of themselves once again, as Gartner cuts their IT spending growth predictions by 1/3rd for the remainder of 2012.

Going into this New Year, Gartner analysts predicted that IT spending would expand worldwide by 3.7%. But in their most recent estimates in April, Gartner has downgraded the 2012 forecast by a substantial amount, now predicting only a 2.5% expansion for the year.

In 2011, predictions were adjusted downward as well throughout the year, when analysts realized that euro-zone sovereign-debt issues and supply chain problems would impact growth more than anticipated. However, the year turned out pretty strong, with overall growth at 6.8%, and sectors such as enterprise software experiencing an amazing 9.2% growth, with strong growth in computer hardware and telecom equipment as well.

As the glow of the New Year wears off in 2012, US currency valuation, macro-economic problems remain in the euro-zone, rising oil prices, and potential issues in China’s overheated real estate market all are conspiring to lower the most rosy of predictions.

Services remains the most challenged, with anemic estimated growth rates of around 1.0% for the year.

Although the Gartner analysts attribute the majority of the revision to US currency strengthening, and remain optimistic that the economy is recovering, as do we, we think that a bigger challenge remains with individual buying decisions, and this can have serious implications to you, the IT sales and marketing professional.

Today, IT executives have fundamentally changed how they make purchase decisions. Years of budget constraints have:

·        Empowered them, fueled by the Internet and social media, to be firmly in control of the decision making process,

·         Trained them to “do more with less”, so they are more frugal,

·         Cautioned them to be fearful of bad purchase decisions, so they are now more risk adverse

·         Made it harder to get consensus, with more business and financial stakeholders are involved in each decision,
Frugalnomics remains in full effect, and as a result, up to 60% of your sales may be frozen with a “do nothing” buyer who is happier to remain with the status quo than to change. This is having an impact on the overall IT spending figures, so that even as the economy recovers, buyers will remain frugal and live be more willing to live with the status quo as a result.

In order to break the status quo and fight Frugalnomics, you will need to make a strong case for change by proving that:

1.       There is a high cost of doing nothing

2.       Substantial cost savings and business benefits can be gained by change

3.       The investment is substantially outweighed by the cost of status quo and the benefits of change

Click here to learn how you can fight Frugalnomics and break the status quo.
Click here for the Gartner IT Spending announcement

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