A deterioration in the global economic outlook this year is leading to scant overall growth in enterprise IT spending, according to Gartner. However the analyst says its third quarter outlook points to “more substantial growth” next year — assuming what it calls “significant fiscal crises” are avoided in the U.S. and Europe. Its view is that enterprises have cut IT spending so much they have little room to reduce it further. It’s forecasting a 2.5 percent increase on projected 2012 spending of $2.603 trillion next year — taking enterprise IT spending to a total of $2.679 trillion in 2013.
“The global economic outlook has deteriorated in 2012, leading to scant overall growth in enterprise IT spending,” said Kenneth Brant, research director at Gartner in a statement. “However, our third-quarter outlook points to more substantial growth in 2013, if significant fiscal crises are avoided in the US and Europe, and in subsequent years. Most organisations have already significantly cut discretionary IT spending growth over the past several years and, barring a global economic catastrophe and significant contraction of operations, they have little room to reduce IT spending further over the long run.”
Gartner expects the largest proportion of enterprise IT spending to fall in the banking, communications, media and services (CMS), and manufacturing sectors through 2016.
In 2013, manufacturing and natural resources will lead the vertical markets with total spending expected to reach $478 billion, up 2.3 percent from 2012’s projected spend of $467 billion. Banking and securities is also expected to have strong growth — with Gartner forecasting a $460 billion spend in 2013, up 3.5 per cent from $445 billion in 2012. The CMS sector is projected to grow 3 percent next year, to $426 billion, up from $414 billion in 2012.
On CMS Gartner noted several subsectors will need to continue to invest in IT, owing to bandwidth demands. “Several subsectors within CMS are heavily IT-intensive. Professional and IT services firms, communications service providers, software and internet services, and media companies invest considerably in IT across hardware, software, IT services, internal services and telecommunications,” noted Brant in a statement. “With demands for a secure Internet connected backbone and faster wireless data services, coupled with the pervasiveness of social media and video, these industries will need to continue to invest in IT.”
Gartner also expects short-term high growth in the transportation and insurance sectors with both projected to achieve more than 4 percent growth in 2013. IT spending in the transportation sector is expected to total $126 billion in 2013, up from $121 billion in 2012, while IT spending in insurance is projected to reach $187 billion in 2013, up from $179 billion in 2012.
This year Gartner expects government IT spending to decline 2 percent — and projects that decline will continue through 2013, with spending forecast to total $445 billion, down from $447 billion in 2012. Despite that decline — attributed to austerity measures and budgetary reductions — the analyst also notes IT budgets are being “decoupled” from overall operating pressures on governments as IT is being seen as a way to drive efficiencies, reduce costs of service delivery and cut future costs.
“Government organisations recognise that new technology investments may help reduce the cost of service delivery, improve operational efficiency or reduce future expenditure. Consequently, government IT spending intensity is beginning to diverge from traditional operational spending trends,” Brant added in a statement.