APAC IT spending to grow 5 p.c. in 2010

MUMBAI, INDIA: The IT industry is exiting its worst year ever, as worldwide IT spending is on pace to decline 5.2 per cent, according to Gartner, Inc. However, the IT industry will return to growth in 2010, with IT spending forecast to total $3.3 trillion, a 3.3 per cent increase from 2009.

In Asia Pacific, IT spending is expected to grow by 5 per cent to reach $515.6 billion in 2010, a senior Gartner executive said today.

Speaking at Gartner Symposium/ITxpo in Sydney this morning, Peter Sondergaard, senior vice president at Gartner and global head of Research, said that this represented a fast V-shaped recovery for IT spending in the region, according to a press release.

“Emerging regions will resume strong growth,” said Sondergaard. “By 2012, the accelerated IT spending and culturally different approach to IT in Asia will directly influence product features, service structures and the overall IT industry. Silicon Valley will not be in the driver’s seat anymore.”

However, growth varies considerably by country, vertical market and IT sector. Sondergaard said that while software would post the strongest growth in Asia Pacific, telecommunications still represented the largest area of IT investment.

In Australia, the five-year outlook for enterprise IT spending is a compound annual growth rate of 1.3 per cent, with total IT spending by Australian business to reach A$56.4 billion by 2013. The vertical sectors with the highest IT spending growth would be communications (3.2 per cent), healthcare (2.6 per cent) and utilities (2.3 per cent).

While IT spending will increase next year, Gartner cautioned IT leaders not to be overly optimistic.

“While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012,” said Sondergaard. “2010 is about balancing the focus on cost, risk, and growth. For more than 50 per cent of CIOs the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011.”

Sondergaard said that the three most-searched terms by Gartner clients on gartner.com provide some clues as to the priorities of IT leaders around the world. Cost remained the most-search term during 2009, although it peaked in May, followed by cloud computing.

“Next year will be the year when cloud computing moves from the discovery phase to small pilots, as part of organisations’ desire to move from owned to shared IT,” he said.

The third most-searched terms on gartner.com were business applications such as ERP and CRM.