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Gartner IT spending forecast shrinks

Company now predicts a 3.7% increase in spending as compared to previous estimates of 4.6%

Gartner IT spending forecast shrinks
Gartner has revised its forecast for IT spending in 2012 from a 4.6% predicted increase to a 3.7% predicted increase.

Gartner has forecast that worldwide IT spending will total $3.8 trillion in 2012, a 3.7% increase from 2011. In 2011, worldwide IT spending totalled $3.7 trillion, up 6.9% from 2010 levels.

Gartner has reduced its IT spending growth outlook from its previous forecast of 4.6%.

All four major technology sectors; computing hardware, enterprise software, IT services and telecommunications equipment and services, are expected to experience slower spending growth in 2012 than previously forecast.

"Faltering global economic growth, the Eurozone crisis and the impact of Thailand's floods on hard-disk drive [HDD] production have all taken their toll on the outlook for IT spending," said Richard Gordon, research vice president at Gartner.

The floods in Thailand are having serious implications for businesses' computer and storage purchases.

Thailand is one of the largest manufacturers of hard-disk drives in the world.

"Thailand has been a major hub for hard-drive manufacturing, both for finished goods and components," Gordon said. "We estimate the supply of hard drives will be reduced by as much as 25%, and possibly more, during the next six to nine months. Rebuilding the destroyed manufacturing facilities will also take time and the effects of this will continue to ripple throughout 2012 and very likely into 2013."

Although large PC OEMs will see fewer problems than others in the industry, no company will be wholly immune to the effects on the HDD supply chain.

Gartner has reduced its shipment forecast for PCs, which has impacted the short-term outlook for the hardware sector. The impact of HDD supply constraints on HDD and PC shipments in the first half of the year compound the cautious environment for hardware spending in general.

Gartner has predicted that telecom equipment spending will show the strongest growth, with revenue increasing 6.9% in 2012, followed by the enterprise software market, which will grow 6.4%.

"With the Eurozone crisis causing uncertainty for both businesses and consumers in Western Europe we have adjusted our forecast, and we expect IT spending in Western Europe to decline 0.7 percent in 2012," Gordon said.


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