IDG News Service — Intel (INTC) and SAP results and various forecasts issued this week suggest that while 2010 was a recovery year for just about all sectors of IT, enterprise software and accompanying services will be the main drivers for technology revenue growth over the next few years.

Though hardware had a good 2010 overall, recent figures show PC market growth slowed in the fourth quarter. Meanwhile, as corporations come to grips with an exploding amount of data they need to analyze, the software sector is expected to boom.

Intel Thursday reported record quarterly results for the fourth quarter, but there is a storm brewing in the PC market on which the chip giant's good fortune depends.

Intel reported 48 percent year-over-year growth in net income, to US$3.4 billion, and an 8 percent uptick in revenue, to $11.5 billion. The results beat estimates by analysts polled by Thomson Reuters (TRI).

The company was sanguine about the current quarter as well, forecasting revenue of $11.1 billion to $11.9 billion, above analyst forecasts of $10.74 billion.

"The economy is forecast to improve," noted Intel CEO Paul Otellini in a conference call. Industry trends and analyst forecasts, however, indicate that the PC market is in a period of upheaval, as consumers and corporate professionals alike turn to tablets and mobile devices for their computing, Internet access and communication needs.

Global PC shipments were slower than expected during the fourth quarter of 2010, slammed by competition from tablets and cautious consumer spending, both Gartner (IT) and IDC said this week. Worldwide PC shipments totaled 93.5 million units in the fourth quarter of 2010, a 3.1 percent year-on-year increase, according to preliminary estimates by Gartner. The estimate was below Gartner's prior forecast of 4.8 percent growth.

On its part, IDC said PC shipments were 92.1 million units during the fourth quarter, growing by only 2.7 percent, and down from its original projection of 5.5 percent growth.

However, for the year, worldwide PC shipments totaled 350.9 million units in 2010, a 13.8 percent increase from 2009, according to Gartner.

"For all 2010, the results indicate the PC market recovered from the recession, as it returned to double-digit growth, compared to low single-digit growth in 2009," said Mikako Kitagawa, principal analyst at Gartner, in a statement announcing the company's estimates. "However, the PC market will face challenges going forward with more intensified competition among consumer spending."

In the face of increasing competition from mobile devices, Intel was optimistic. "In 2011, you will also see Atom in a wide array of tablets running three different operating systems," Otellini said on the conference call.

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