Gartner’s IT Spending Forecast Heats Up For Summer

In their just released outlook, Gartner raised annual IT spending growth predictions, from a cool 2.5 percent, to a much warmer 3 percent. This puts worldwide IT spending at $3.6 trillion this year, up barely from $3.5 trillion in 2011.

Even with weak business confidence and consumer sentiment in the past quarter, eurozone crisis, weaker than expected U.S. recovery, and a slowdown in China providing significant headwinds, Gartner indicates that the outlook is not great, but at least “stabilized”.

The better forecast was boosted by enterprise spending on public cloud services, projected to more than double over the next four years, from $109 billion in 2012 to $207 billion by 2016. Public cloud spending grew 20% in 2012, up from $91 billion just last year.

According to Gartner’s press announcement touting the survey results, "Business process as a service (BPaaS) still accounts for the vast majority of cloud spending by enterprises, but other areas such as platform as a service (PaaS), software as a service (SaaS) and infrastructure as a service (IaaS) are growing faster," said Richard Gordon, research vice president at Gartner.

However, even with the indicated rise in public cloud spending, and what Gartner indicated as high demand due to the complexity of environments for global business and technology leaders, growth in IT Services spending lags dramatically, with less than 2.3% growth in 2012, and continued underperformance comparatively into 2013.

Telecommunications equipment and enterprise software remain the best spending growth sectors, with bright spots also including a rise in:
·         Tablet and mobile computing,
·         Replacing obsolete enterprise software with SaaS,
·         Virtualization and scale-out servers  vs. scale-up architectures,
·         Analytics and big data,
·         New net telecommunication connections in emerging markets, and mobile driven demand in established regions.
Even with the predicted increase in spending, the growth rate remains extremely low. With little on the horizon to clarify the economic picture, the drag on IT spending may continue well into 2013.
Frugalnomics remains in full effect, with IT executives tasked to carefully innovate, get more out of each and every dollar invested, and do-more-with-less. Buyers will remain more overloaded, skeptical and frugal than ever before.

This remains a golden opportunity to implement value selling and marketing to fight Frugalnomics, and gain a competitive edge. Especially enabling customers to self-assess their objectives and sales to provocatively challenge do-nothing buyers into action by:

1.       Quantifying the “cost of doing nothing”,
2.       Calculating the benefits, return on investment and payback of proposed solutions,
3.       Assuring superior value by quantifying competitive & total cost of ownership advantages.
Click here for more information on how to Fight Frugalnomics.

Comments

Brian MacIver said…
Great insight as usual, Tom.

And it is the Salespeople with the Best "numbers" who are going to win more than their fair share.

The need for your Products, calculators and output is HIGH!

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