Global IT spend to hit $3.4 trillion this year

IT spending around the world is set to hit $3.4 trillion (1.7 trillion) this year, up eight per cent from 2007, according to a report from analyst firm Gartner.

While such growth is encouraging in the face of an economic downturn, the report suggested that much of the growth is actually because of the struggling US dollar. The report said that spending expressed in constant currency' is actually 4.5 per cent, and largely driven by emerging markets.

"The US-led economic downturn shows no sign of causing a recession in IT spending," said Jim Tully, vice president and distinguished analyst at Gartner. "In subsequent years we will see reduced growth, but the fundamentals remain strong. Emerging regions, replacement of obsolete systems and some technology shifts are driving growth."

Software will attract 10 per cent spending growth this year to $408 billion. "Most companies updated their software systems during the period 1997 through 2001, as a result we are in the middle of an upgrade cycle that should extend past the end of this decade," said Joanne Correia, managing vice president at Gartner.

But she warned that new systems does not necessarily mean growth in the software market, as Software as a Service (SaaS), cloud computing and open source software are changing the shape of the market. "Many of these factors are impacting market growth as enterprises replace assets with per-use services," she added.

A jump in software spending will also help drive growth in IT services, as companies need to pay someone to implement new programs. Because of this, and moves to improve efficiency, IT services will see 9.4 per cent growth to $819 billion this year.

The hardware market will be worth $408 billion globally this year, with PCs the main growth area, worth about 60 per cent of the market. The strong PC sales growth surprised Gartner, as it showed no signs of a slowdown, helped by growth in low-cost, portable netbooks'.

"The market growth outside of the US and the effects of the weak dollar are major factors in growth in US dollar terms. In addition to regional shifts, a strong shift to mobile PCs is occurring. The higher prices of these products result in increasing revenue per unit and a boost to the overall market," Tully said.

Last week, Gartner predicted that sub-laptop sales would top five million this year.