Cloud, SaaS Help Fuel IT Spending Growth

Cloud computing and Software-as-a-Service (SaaS) technologies, along with unseasonably strong hardware sales in the first quarter, will give global IT spending a 5.3 percent bump for the year, according to recent forecasts released by Gartner.

The Stamford, Conn. research firm on Monday said worldwide IT spending will hit $3.4 trillion for 2010, a jump of 5.3 percent from 2009's $3.2 trillion IT spending. And that growth will continue into 2011 when IT spending is expected to surpass $3.5 trillion, a 4.2 percent increase from this year.

"And while hardware spending is expected to rise 5.7 percent from 2009 to 2010, reaching $353 billion thanks to robust consumer spending on mobile PCs, hardware spending will stay below 2008 levels," Gartner said. "Server spending will take a hit from virtualization, consolidation and the cloud, keeping hardware spending below 2008 levels through at least 2014."

"Near-term spending on servers will be concentrated on lower-end servers; longer-term, server spending will be curtailed by virtualization, consolidation and, potentially, cloud computing," said Gartner, adding that mobile PCs along with Windows 7 and mobile devices will contribute to the increase in hardware spending as server sales drop.

Software spending is also expected to rise, jumping 5.1 percent from 2009 to 2010 to reach $232 billion, Gartner said. The software market was not hit has hard as other IT segments by the recession, Gartner noted, adding that most enterprise software markets will also see positive growth this year.

And the infrastructure market is expected to boom as the software used to build, run and manage an enterprise grows. Gartner said the infrastructure market will be the fastest-growing segment through 2014 with virtualization, security, data integration/data quality and business intelligence representing the hottest software. Meanwhile, the applications market will also see strong growth.

"Cost optimization, and the shifts in spending form mega suites to the automation of processes will continue to benefit alternative software acquisition models as organizations will look for ways to shift spending from capital expenditures to operating expenditures," said Joanne Correia, managing vice president at Gartner, in a statement. "Because of this, vendors offering software as a service (SaaS), IT asset management, virtualization capabilities and that have a good open-source strategy will continue to benefit. We also see mobile-device support or applications, as well as cloud services driving new opportunities."

IT services spending is also expected to grow in 2010, reaching $821 billion by Gartner forecasts, an increase of 5.7 percent compared to last year. The growth is helped by a jump in outsourcing revenue in late 2009.

Other areas of growth include telecom spending, which will increase 5.1 percent to $2 trillion in 2010 and network services spending which Gartner expects to grow 2 percent in revenue this year.

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