Gartner trims worldwide IT spending growth forecast to 3.9 pc

BANGALORE: Worldwide IT spending is forecast to $ 3.350 trillion in 2010, an increase of 3.9 per cent compared to the last year spending of USD 3.225 trillion, according to the latest outlook by IT advisory and research firm Gartner, Inc.

Gartner has lowered its outlook for the IT industry from the first quarter of this year, when it forecast worldwide IT spending to grow 5.3 per cent, primarily due to devaluation of the Euro versus the US dollar since the beginning of the year.

"The European sovereign debt crisis is having an impact on the outlook for IT spending," said Richard Gordon, research vice president at Gartner.

"The US dollar has strengthened against the Euro during the second quarter of 2010 and this trend will likely to be continued in the second half of 2010, which will put downward pressure on US-dollar-denominated IT spending growth."

"Longer-term, public-sector spending will be curtailed in Europe, as governments struggle to bring budget deficits under control during the next five years and to reduce debt during the next 10 years," Gordon said.

He said private-sector economic activity is likely to be hindered, due to the direct impact of austerity measures on key government suppliers and the indirect impact caused by the 'ripple effect'. An effective policy response would be critical to stimulate investment in general and in IT in particular.

Worldwide computing hardware spending is forecast to reach USD 363 billion in 2010, up 9.1 per cent from 2009 spending.

"The computing hardware sector continues to benefit from a healthy PC sector, which accounts for two-thirds of total spending in this area, and we expect PC shipments to remain robust throughout 2010 and 2011," Gordon said.

"Consumer shipments will continue to be powered by strong mobile PC uptake, while professional shipments will be buoyed by a new replacement cycle and migration to Windows 7", he added.

In software, IT services and telecommunications, the appreciation in the value of the US dollar, especially against the euro, has acted to dampen US-dollar-denominated growth in 2010.