IDC Forecasts Growth For IT Spending

Software, services to drive 3.7 percent rise worldwide

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A flash of optimism in an otherwise dismal IT market came from IDC this week as the analyst firm predicted that IT spending in general and spending on storage management software and business process outsourcing in particular will all rise this year and beyond.

Worldwide IT spending in 2002 should reach $981 billion, up 3.7 percent compared to 2001, IDC said in a report released on Wednesday.

However, the bulk of that increase will come from software and services. IT spending on hardware will fall 4 percent, IDC predicted.

Spending will probably grow 9 percent in 2003 to exceed $1 trillion for the first time in history, the analyst firm said.

For the U.S., IDC expects total IT spending to hit $436 billion in 2002, up 3 percent over 2001.

While new projects will remain on hold this year, growth will be fueled by replacement of products whose lifecycles have have been extended beyond normal over the past six quarters, the firm predicted. That will result in uneven growth among vendors, IDC said.

IDC on Tuesday predicted that the storage software market will reach $13.6 billion in revenue by 2006. This is over double the $5.6 billion recorded for 2001.

Storage resource management is expected to be the fastest growing segment of the storage software market, rising at a compound annual growth rate of 21.6 percent, IDC said.

Also on Tuesday, IDC said the business process outsourcing market, including such functions as human resources, logistics, procurement, engineering, marketing and sales, should hit $1.2 trillion in revenue worldwide in 2006, compared to $712 billion this year.

The Americas, thanks to the U.S. lead in this space, will account for 60 percent of worldwide business process outsourcing opportunities, the analyst firm said.

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