IT spending to climb in 2013: Gartner

The Boardroom

by Steve Evans| 15 November 2012

But only if major economies can survive current crises, analyst house says


Worldwide enterprise IT spending will see a slight increase in 2013, according to Gartner. However the analyst house warned that spending will only increase if economies in the US and Europe avoid "significant fiscal crises."

Gartner's report indicated a strong end to 2012 in terms of enterprise IT spending will roll over into 2013, where spending will increase 2.5% to $2.679 trillion. Banking, communications, media and services (CMS) and manufacturing are expected to be the big spenders next year, the company said.

However Gartner warned that spending is only likely to increase if economies in the US and across Europe can avoid another collapse. At the moment that looks like a big 'if'.

"The global economic outlook has deteriorated in 2012, leading to scant overall growth in enterprise IT spending," said Kenneth Brant, research director at Gartner. "However, our third-quarter outlook points to more substantial growth in 2013, if significant fiscal crises are avoided in the US and Europe, and in subsequent years."

Brant added that many organisations have already trimmed IT spending in response to the economic situation over the last few years, so are well placed to increase spending... if the economic situation allows.

"Most organisations have already significantly cut discretionary IT spending growth over the past several years and, barring a global economic catastrophe and significant contraction of operations, they have little room to reduce IT spending further over the long run," he said.

Most vertical industries Gartner examined are forecast to increase their IT spending during 2013. Companies in the manufacturing and natural resources sector will increase IT spending by 2.3% to hit $478bn. The banking and securities sector will see a 3.5% rise to $460bn while the CMS sector will see a 3% growth to $426bn.

However government IT spending will fall, dropping 2% in 2012 and see another small drop in 2013, to $445bn from $447bn in 2012.

Brant claims that as governments adopt newer, more cost-effective technologies, spending will naturally dip.

"IT budgets are being "decoupled" from the overall operating pressures facing governments. At the same time, government organisations recognise that new technology investments may help reduce the cost of service delivery, improve operational efficiency or reduce future expenditure," he said. "Consequently, government IT spending intensity is beginning to diverge from traditional operational spending trends."

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