TechWeb

Global IT Spending Shows Less Growth, Forrester Says

Jul 15, 2013 (08:07 AM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=240158259


Technology spending in the U.S. will grow 5.9% during the remainder of 2013, according to a new report from Forrester Research. Canadian, Japanese, Australian and Indian tech markets also will grow. But only smaller markets in Latin America and Eastern Europe, the Middle East and Africa (EEMEA) will surpass the U.S. Globally, tech spending will slow down, especially in Europe and China, said the report.

In January, Forrester predicted a global tech market growth of 5.4% in local currencies and 3.3% in U.S. dollars. It predicted modest growth in the U.S., recession in Japan, a second half end to the European recession and improving economies in pockets of Asia, Latin America and the EEMEA. Halfway through 2013, the forecast for global tech has changed. For the remainder of the year, Forrester predicts it will grow just 2.3% growth in U.S. dollars and 4.6% in local currencies.

Despite lower government spending, U.S. tech has grown due to increased stock prices, a stronger housing sector and increased employment growth, which facilitated consumer spending. Europe avoided a Euro collapse but continues to struggle through recession. In Asia, China has shown a decrease in consumer spending and property values while Japan has experienced an economic boost.

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Global tech spending is anticipated to reach $2,069 billion, with software showing the most growth. Forrester predicted that business and government purchases of software will grow by 3.3% in U.S. dollars and 5.7% in local currencies for the remainder of 2013. 2014 will show 6.2% growth.

The 3.3% increase in software purchases might not seem like much, but software will lead tech categories in 2013 progress. Software innovations include software-as-a-service (SaaS) and platform-as-a-service (PaaS) products and predictive analytics, big data and mobile apps, and app stores. As software progresses, IT consulting and systems integration services that assist with the selection, implementation and usage of software will also increase, with 3.1% growth in 2013.

Forrester predicts that computer equipment will also experience innovation throughout 2013, though not as much. Tablets will play a key role in hardware growth from 2.5% in 2013 to 5.1% in 2014. Communications equipment will show the least growth, with 0.2% in 2013, but is predicted to increase to 5.2% in 2014. IT outsourcing and hardware maintenance will decrease throughout the next year. The outlook for tech demand is expected to be brighter for 2014. The increased strength of the U.S. economy, European recovery, and continued progress of Asian markets such as China, India and Japan will lead to global growth of 6.5% in local currencies and 5.6% in U.S. dollars. For Western and Central Europe, Forrester predicts 2014 growth will be 3.9% in euros and 3.1% in U.S. dollars.

Throughout the world, increased spending on cloud, mobile and smart computing technologies will make up for decreased business and government spending. In both strong and weak economies, new technologies are expected to drive tech markets into a prosperous 2014.