2007 could be a banner year for the IT industry as worldwide IT spending is projected to surpass $3 trillion, according to Gartner Inc.
The market-research group predicts IT spending by year’s end will reach $3.1 trillion, up 8 percent from last year, and spending for 2008 is forecast grow 5.5 percent to total $3.3 trillion.
Peter Sondergaard, senior vice president and global head of research at Gartner, says IT leaders should create two IT budgets for 2008. The first should reflect the same kind of marginal growth prepared during the past six years. The second budget should assume the need to cut costs in response to the arrival of a possible recession.
“The business plans that you had in June are probably not going to completely address the changed conditions of your business in November,” Sondergaard recently told an audience of 6,000 IT decision makers. “Together with your business colleagues and your CEO, you are going to have to deliver new efficiencies, new innovations and new ideas to sustain profitability and growth. IT will be core to many of those responses.”
According to Sondergaard, the challenge for IT leaders is how they are going to react: “Simply delivering internally focused savings isn’t going to be enough. You (IT leaders) need to step up to the challenge of delivering new solutions to those critical business imperatives.”
On a worldwide basis, IT spending continues to grow at a rapid pace in developing countries, Gartner says, with one-third of IT spending now occurring outside of North America, western Europe and Japan. “This development will create new innovation in IT, new competitors, new usage patterns and continued cost improvement benefits for users,” Sondergaard adds.
As IT moves east and south, it mostly will affect the growing areas of the industry. End-user spending globally will move toward software, services and all aspects of mobility. These categories made up 57 percent of spending in 2006 and will become 60 percent in 2008.