Analyst Report: IT spending update, fourth quarter 2012

Analysis

IT spending grew 3.6 percent between 2011 and 2012. Many factors have driven this demand for IT products and services, such as the growing ubiquity of smartphones, tablets, the cloud, mobility, big data, andsoftware-defined networking and trends in social, analytics, and business-process transformation. However, relentless global economic weakness and uncertainty have resulted in a deterioration of worldwide IT spending through the third quarter and will continue to be an anchor in the fourth quarter.

This report is the second in a series of quarterly GigaOM Pro worldwide IT spending forecasts. It is intended to help vendors and users of IT technology better align their technology and business strategies by identifying where their peers and competitors are focusing their investments in 2012. Additionally, this report creates a baseline context for evaluating the extent of adoption of emerging technologies that are driving IT innovation today.

Next year, 2013, can only be characterized as uncertain. We conservatively forecast a 4.7 percent growth in constant currency in 2013, accounting in particular for macroeconomic dithering and cash hoarding. We think that the looming fourth-quarter major product refreshes will provide some uplift for 2013. And if the uncertainty abates sufficiently to allow enterprises to open their wallets, there will be a real upside to 2013. So we’re looking to the fourth-quarter results in 2012 to help point the way for 2013.

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Smartphones and tablets have buoyed otherwise weak hardware spending in 2012, with PC, peripheral, and server spending in significant decline. This will continue into 2013. Software has held its own, especiallysolutions-related software like SaaS-enabled customer-relationship management (CRM), supply-chainmanagement (SCM), and health care systems. This trend will also continue in 2013. The services sector has experienced a punishing 2012, and it will only look slightly better in 2013.

Macroeconomics aside, the IT industry is undergoing a momentous transition that has been stunted by a seemingly interminable financial malaise and intense pressure on spending. The upside is that this is accelerating the focus on transformative, higher-value offerings and lower-cost disruptive technologies.

Table of Contents

  1. Summary
  2. Macro picture
  3. Detailed segment growth for 2012
  4. Key takeaways
  5. Methodology
  6. About Ralph Finos
  7. About GigaOM Pro

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