Software To Propel 2013's Global IT Spend To $2.06 Trillion, Forrester Says


Forrester Research predicted global IT spending will reach $2.06 trillion in 2013, with software and applications driving growth, according to the research firm's latest global IT spend report.

The research firm predicted 2.3 percent growth overall in business and government tech spending, similar to research firm Gartner's 2 percent worldwide growth forecast. However, Forrester's prediction of $2.06 trillion in global IT spending is a much lower assessment dollarwise than Gartner's $3.7 trillion prediction earlier this month.

Bob Nitrio, CEO of Ranvest Associates, an Orangevale, Calif.-based solution provider, said he doesn't know how the companies conduct their research, but he was surprised at the gap.

"That's a pretty big discrepancy [in dollars]," Nitrio said."Obviously, one of them is going to be wrong by a large amount.”

[Related: IT Spend To Grow 2 Percent In 2013: Report]

Within Forrester's analysis of spending on IT products and services, software will account for the largest piece of the pie with an anticipated $542 billion -- driven in large part by application spending, which is expected to reach about $234.6 billion.

Allen Falcon, CEO of Cumulus Global, a Westbourough, Mass.-based solution provider, said he's seen a shift in the way companies invest in IT.

"We see companies more willing to spend, but they're really focused on the business value of what they're spending their money on," Falcon said. "Companies that put projects on hold are bringing those projects back to life, but they want those solutions to be less expensive and more in line with their business operations than past IT spending."

The longer life cycle of technology products also is having an impact, according to Nitrio.

"Quality of the hardware is so much greater than it was in years past," Nitrio said. "I think that the product life cycle is a part of that [shift]. I could see where software applications would take a larger share of the spend."

Growth in software alone is expected to see a larger rise than the overall IT spending market this year, with 3.3 percent expected growth in U.S. dollars, Andrew Bartels, vice president and principal analyst at Forrester, said in a blog post.

"Software, especially for analytical and collaborative applications and for Software-as-a-Service (SaaS) products, continue to be a bright spot," Bartels said in the post.

Falcon said he's definitely seen more companies turn toward SaaS as they move from traditionally hardware-centric services to cloud-based applications.

"Whereas a year ago we were moving a lot of organizations to Google apps, replacing the in-house mail server, we are now doing much more leveraging of Google apps and Google mail -- not just for mail servers, but file servers as well," Falcon said. "By replacing in-house file servers, we're able to eliminate the need for virtual private network infrastructure."

PUBLISHED JULY 17, 2013