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January 15, 2013

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Find light of opportunity in gloom of IT forecasts

By Chris Gonsalves

If the somewhat tepid predictions for technology investments has you feeling a bit gloomy about expansion in the coming year, it’s important to look at the numbers within the numbers to find the real bright spots in IT. To hear analysts tell it, even in these lackluster times, there’s few better opportunities out there right now than those afforded by the growing areas of analytics, Big Data, mobility, collaboration and cloud.

Forrester Research recently spun out a global technology market forecast calling 2013 “a transition year” with fairly unimpressive overall growth in global tech spending of around 5.4 percent well into 2013, slightly worse in Europe and other areas wrestling with the stubborn worldwide recession.

The figures look slightly better for 2014, when the analyst firm calls for IT spending growth in the neighborhood of 6.7 percent. Pushing those figures down are the stalled markets for PCs, storage, servers and peripherals where spending is expected to stay flat despite modest upticks in demand fueled by tablets and the desire for Microsoft’s Windows 8 operating system. The dour outlook is mirrored by Gartner, who released its own set of gloomy predictions calling for spending growth on devices, tablets and printers at just 6.3 percent. Overall, Gartner lowered its own long-term estimates on 2016 IT spending from 6.4 percent to just 4.5 percent.

So where is light at the end of this tunnel? In Forrester’s estimation, growth will come from “the pent-up demand for new technologies” like mobility and “smart computing” like Big Data and cloud technology. This demand will free-up requisite portions of IT budgets and accelerate a veritable windfall in IT spending.

“This will be the story of 2013 and 2014,” Forrester analysts say with confidence.

Analytics, Big Data, mobility, collaboration and cloud continue to drive tech buying, especially in developed markets, Forrester notes. In software, business intelligence and analytics apps will be hot, along with smart process apps for collaborative business processes. The latter, which are primarily sold in a software-as-a-service model, will help SaaS subscription revenues grow two to three times faster than combined license-and-maintenance software.

In fact, software and IT outsourcing will be among the strongest segments in 2013, segueing into a strong year for software and computer equipment in 2014. IT outsourcing and hardware maintenance are expected to jump close to 7.5 percent even in the struggling economies of Europe and Japan, as firms turn to outsourcing to save money. Everywhere else, software will be the primary growth engine, with global growth north of 6.5 percent. When most of the world’s economies bust out of their funk next year, look for computer equipment sales to join software as the fastest growing categories at 7 percent and 8.8 percent, respectively. IT consulting and systems integration services won’t be far behind at just under 7 percent, Forrester predicts.

Bottom line for the CIOs and IT leaders: Lackluster predictions aside, 2013 is still the year to solidify your cloud-centric strategy. If spending is set for a 2014 boom, it will serve your organization best to be ahead of the curve with a solid strategy for mobility, cloud and next-gen data processing. Gear up and get ready.

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