Cloud Is ‘Bright Spot’ in Global IT Spending
July 10, 2012
Grazed from Wall Street Journal. Author: Clint Boulton.
Gartner said IT spending is expected to rise 3% to $3.6 trillion in 2012, largely on the strength of increased spending on cloud computing. The outlook for this year was raised from an earlier forecast of 2.5% growth. Nonetheless, the growth for this year will be much slower than the 7.9% gain in 2011, as economic turmoil in Europe, and slowdowns in China and the U.S. put pressure on IT budgets.
Cloud computing, which lets CIOs offload their hardware hosting and maintenance to a vendor, is one of the “bright spots” in IT spending, said Gartner analyst Richard Moore. Spending on the cloud is expected to rise to $109 billion this year from $91 billion last year. Moore said cloud-based business process software accounts for the bulk of cloud spending by enterprises, followed by platform as a service, software as a service and infrastructure as a service. Moore said cloud spending could nearly double to $207 billion by 2016…
Worldwide computing hardware spending will grow 3.4% this year to $420 billion. Gartner analyst George Shiffler said on a webinar that the popularity of Apple’s iPad led Gartner to boost its worldwide tablet sales expectations for this year from 103 million units to 118 million units. Shiffler also said tablet growth would flatten as vendor competition drives down average selling prices for tablets and new Windows-based Ultrabook PCs apply pressure.
In enterprise hardware, Gartner analyst John Hardcastle said CIOs are dropping a “scale up” strategy of buying $1 million servers for the “scale out” approach championed by Google, Facebook and other Internet companies. In this model, companies purchase several smaller computers for $5,000 each, and run smaller workloads on the machines. This significantly cuts hardware spending costs; it’s also a hallmark of cloud computing.
Enterprise software spending may grow 4.3% in 2012 to $281 billion. Gartner analyst Colleen Graham said she is seeing a lot of “obsolete systems being replaced” by newer software, including cloud-based solutions.
Telecom services remains the largest IT spending sector, accounting for nearly $1.7 trillion this year. Telecom services spending, which includes new net connections in emerging markets and an increase in mobile device contracts for tablets and smartphones, is forecast to grow 1.4% this year.
Gartner made its IT spending forecast by polling three-quarters of the Global 500 companies.