Security concerns boost IT spending

Sept. 11, 2012 at 3:30 PM
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RIO DE JANEIRO, Sept. 11 (UPI) -- Growing security concerns and economic recovery in emerging markets will boost global spending on information technology with Brazil leading the way in Latin America and China in Asia, latest data indicate.

Including telecom services, total information and communication technology spending will increase 5 percent this year to $3.6 trillion -- a 2.5 percent growth over last year.

The data from the International Data Corp. include forecasts that worldwide IT spending -- not including telecoms -- is set to grow 6 percent this year, despite economic uncertainty in North America, Europe and parts of the developing world.

Earlier data from Internet security companies active in South America and environs indicated that the Caribbean is emerging as a surprise growth area, partly because of governments' response to a spillover of drug-related and cyber crime from Central and South America.

IDC said the growth this year would likely be built on strong performance by companies trading in software, storage, enterprise network and mobile device markets.

New research called "Worldwide Black Book Query Tool, Version 2, 2012" shows worldwide IT spending remains on course and is set to continue next year.

The projected 6 percent growth is calculated in constant currency and is only slightly lower than the 7 percent growth in 2011 -- not surprising amid continuing macroeconomic uncertainty.

The strong performance in the software, storage, enterprise network and mobile device markets has offset weaker trends in PCs, servers, peripherals and telecom provider equipment.

The strength of the U.S. dollar in the first half of 2012 means that IT spending in dollar terms is likely to grow 4 percent this year, a downturn for U.S. vendors from the U.S. dollar growth rate of 10.5 percent in 2011.

"In spite of economic uncertainty, which continues to inhibit enterprise investment in some tech segments, the continuing demand for tablets, smartphones, storage capacity, and network performance improvements actually outperformed expectations in the first half of the year," said Stephen Minton, IDC vice president for Global Technology and Industry Research Organization.

"Software spending has been robust, even in regions where economic trends have been weakest, as businesses turn to software tools and applications as a means of implementing cost-reduction strategies."

Key trends in the global IT market in 2012 showed discouraging developments in Europe and North America and promising upturns for business in emerging markets.

U.S. IT spending continues to be weaker than in 2011 with growth of 5.9 percent forecast, down from 8.5 percent last year. The launch of Windows 8 in the fourth quarter should help to drive a meaningful recovery in the PC market in 2013, the survey suggests.

While Western Europe remains weak overall due to the slow economy, software growth in Northern Europe has been robust, and mobile device shipments (smartphones and tablets) have remained on course. However, Europe is on course for 1 percent growth in constant currency (a decline of 4.5 percent in U.S. dollars) if mobile devices are excluded from the forecast.

Growth in emerging markets is still relatively strong, the report said.

China, affected by slowing exports to Europe, is on course for 14 percent higher spending on IT this year.

Brazil's 14 percent growth this year will be matched by India and lower growth in Russia -- 11 percent -- and South Africa, 8 percent.

IDC's Worldwide Black Book provides forecasts for IT spending in 54 countries around the world, focusing on 25 individual market segments across hardware, software, IT services, and telecom services for individual countries in all regions including.

IDC is a wholly owned subsidiary of International Data Group and has headquarters in Framingham, Mass.

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