by Tony Westbrook

Bolder Britons to hike IT spending claims analyst

Feature
Jan 21, 20134 mins
Cloud ComputingIT LeadershipIT Strategy

As you plan for the year ahead, you’ll probably be wondering whether 2013 will be another difficult year for your business or whether you’ll see any green shoots of recovery this spring.

It would take a genius or a fool to predict the economic outcome in 2013, but Gartner has kicked off bravely with the latest update to its IT spending review and forecast, compiled in the last quarter of 2012. The methodology is based on a complex analysis of IT vendors’ sales activity and predictions, and so it is an insight into how the industry expects the future to unfold, and what it thinks it will be selling to which CIOs.

While Gartner analysts conceded that plenty of uncertainly remains, the report suggests we may be coming the end of that prolonged period of uncertainty. Accordingly Gartner provides an encouraging forecast of IT spending for 2013: a 3-4 per cent lift globally pushes overall spend just over $3.7 trillion. The percentage jump in North America is higher still. So while 2012/13 is going to be a little slower than vendors once hoped, the overall picture is encouraging.

The report is authored by John-David Lovelock, Gartner’s research vice president. The analysis, coming out of Toronto, does feel slightly North America-centric, suggesting that if US economic issues can be resolved in the next few months (the much debated fiscal cliff), things will look certain for a longer period than in some time. And, writes Lovelock, IT spending rises when we have certainty.

In the east, Australia and China are predicted to grow above average in 2013, while here in Europe we are largely responsible for pulling the global average down due to continued uncertainly about the euro. Vittorio D’Orazio, Gartner’s research director, describes a clear north-south divide with Greece and Italy predicted to do very little extra spending while the UK and some Nordic countries outperform the average. Gartner refers to a ‘nexus of forces’ – mobility, social, cloud and big data – as the drivers for this spend. The UK’s 1.8 per cent increase is much better than the 0.8 per cent European average: Gartner predicts 1 per cent growth in Germany and 0.3 per cent growth in France.

So if Gartner thinks you will be buying more IT stuff in 2013, exactly what will it be? Referring back to that ‘nexus of forces’, the report predicts a continued reduction in hardware costs – even with the introduction of mobile client solutions – resulting in a 3.1 per cent drop in spend. On the other hand IT services will be up 4.2 per cent, software support up 6.8 per cent and consulting up 5.9 per cent as IT undergoes major change. D’Orazio explains the UK’s above-average showing, claiming British CIOs are more prepared to take more innovative steps and less afraid of change than their European peers.

Gartner also thinks UK IT spending will be weighted in some sectors, especially transportation, insurance and retail, so if you are active in these areas, you may find justifying that next change programme a little easier. Conversely, government, education, comms, media and services are all likely to see less growth, D’Orazio suggesting that there was a blip in investment to prepare for the Olympics, and that this is the inevitable corollary.

We only have to look at current political debates in the UK to see how damaging sentiment continues to be to our economic climate. Very few economists would argue that splitting the Union up or having the UK leaving the EU would be anything other than commercial suicide for all the affected economies and companies, yet politicians happily talk in terms that suggest that this is a possibility, largely for party political reasons.

However, it now feels as if we are on the cusp of a change. If political sentiment in the UK improves, maybe green shoots will indeed be apparent by spring. Gartner’s IT investment figures certainly seem to believe it.

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