Emerging markets continue to lead the way in tech spending, with BRIC countries showing double-digit growth.
According to the new International Data Corporation (IDC) Worldwide Black Book just released, IT spending increased by 5 percent at constant currency in 2011, despite the worsening economic situation in Western Europe and volatility in other regions. Emerging markets continued to lead the way, with tech spending in the BRIC countries (Brazil, Russia, India and China) enjoying another year of double-digit growth. Strong demand for mobile devices and software across most regions ensured a positive finish to the year, despite the impact of the hard-disk drive (HDD) shortage in PC markets.
In U.S. dollar terms, the IT industry grew by almost 9 percent in 2011, but year-to-year comparisons could be difficult for U.S.-based IT vendors this year if currency conditions are less favorable. In constant currency, IDC projects another year of 5 percent growth for worldwide IT spending in 2012. Hardware and software spending are each forecast to increase by 6 percent (in constant currency), with 4 percent growth in IT services.
The strongest growth in 2011 came from smartphones (up 46 percent), software (up 6 percent) and disk storage systems (up 6 percent). Businesses continued to invest in infrastructure upgrades, along with new software applications and mobile devices (including tablets). These positive trends are expected to continue in 2012, when enterprise spending on network equipment will also accelerate as many organizations invest in network upgrades to cope with the continuing increase in digital information, which will meanwhile ensure another positive year for the storage market. By the end of 2012, the PC industry will also return to positive growth.
"There are risks to the outlook for 2012, mainly related to macroeconomic weakness in Europe, where IT spending is still weak," said Stephen Minton, vice president of IDC’s Global Technology and Industry Research Organization. "In a downside scenario, things could get much uglier in Europe and have a ripple effect through other regions. But leading indicators in the U.S. have improved in recent months, and emerging markets show no signs of a slowdown yet."
The macroeconomic crisis in Europe has already had a severe impact on IT spending in that region. Overall IT investment was flat in 2011, with declines in spending on PCs, servers, storage, peripherals, and enterprise network equipment. The recovery in Europe will be a long haul, with less than 1 percent growth this year and 3 percent in 2013.
“Europe is going to experience a long, drawn-out recovery," said Anna Toncheva, program manager and economist in IDC's Global Technology and Industry Research Organization. "The debt crisis will take a long time to resolve, and there are numerous downside risks which could yet see the unravelling of the European single currency and, in the near term, an escalation of the crisis due to sovereign debt defaults in peripheral Eurozone countries."
In other regions, however, the momentum of 2011 is still evident in recent polls, which show continuing enthusiasm for tech investment amongst businesses and consumers. In the U.S., where IT spending increased by 7 percent last year, 2012 is likely to bring another year of solid growth (5 percent) driven by mobile devices, software, and network equipment. Japan will see a return to positive growth, after the declines triggered by last year's tsunami and earthquake disaster. IT spending in Brazil, Russia, India and China will be up by 9 percent, 11 percent, 16 percent and 15 percent, respectively.
IDC's Worldwide Black Book provides forecasts for IT spending in 54 countries around the world. IT spending forecasts focus on 25 individual market segments across hardware, software, IT services, and telecom services for individual countries in all regions including North America, Latin America, Western Europe, Eastern Europe, Asia/Pacific, the Middle East, and Africa. The Worldwide Black Book Query Tool presents all data in the following exchange rate views: U.S. dollars in constant currency, annual and year-to-date exchange rates, and local currency.
Additional products in this category include the Worldwide Enterprise Black Book, which analyzes annual IT spending in relation to four company size segments based on employee counts. The Worldwide Black Book, Premium Edition, includes cloud spending forecasts, quarterly IT spending forecasts by region, IT vendor market share analysis, macroeconomic indicators, IT/Internet penetration, and CIO survey data. The United States Black Book: State IT Spending by Vertical Market is a quarterly analysis of the status and projected growth of the IT industry in 50 states and across 15 vertical markets.
For additional information about this research, or to arrange a one-on-one briefing with Stephen Minton or Anna Toncheva, please contact Sarah Murray at 781-378-2674 or
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