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By Michelle Maisto on 2012-01-18
Gartner analysts, summing up fourth quarter IT spending and looking ahead for 2012, offered global scenarios that could play out not so much from good to bad, but mildly bad to far worse. During a Jan. 10 webinar, Gartner analysts revised the firm's global IT spending forecast for 2012 from 4.6% to 3.7%, pointing to a global economic slowdown, the Eurozone crisis and the recent floods in Thailand. While the floods have received considerably less media attention than Japan's catastrophic earthquakes and tsunami, they're expected to have a far greater, and indeed unprecedented, effect on the tech industry, with no global OEMs expected to receive 100% of the HDDs they require. The good news, all agreed, is that 2012 is no 2009. Despite the forecast reduction, there's nonetheless an expectation of some growth, and companies are still spending, if in select areas. One such area is software, where investments are shifting from growth-oriented opportunities to solutions that enable organizations to do more with the same number of people.
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The Three Key Economies to WatchThree economies to pay attention to: the U.S., Western Europe and China. Things are on the mend in the U.S., where subdued growth is expected to replace double-dip recession fears. Western Europe, however, appears headed for a recession in 2012, with the questions being how badly and for how long. China's housing growth, it's feared, could be a bubble.
The Eurozone Situation Gartner sees the situation in Europe potentially ranging from muddling through to "a complete meltdown." For those budgeting, the scenario most likely to play out in the months ahead involves politicians working together to prevent a breakdown of the Euro and political and trade chaos.
The Impact of Flooding in Thailand Gartner analyst John Monroe estimates that 123.9 million HDDs shipped during the 4Q 2011, down from 175.8 million in 3Q. "The IT world is about to wake up to the hard impacts of almost 30% of a devalued, commoditized but absolutely crucial and complex technology being removed virtually overnight from the global supply chain. This has ... never happened before," said Monroe.
Resolution of HDD DemandInventory isn't expected to be back to normal until late in 3Q or early in 4Q 2012. Storage customers not using storage efficiency technologies, says Monroe, "are making a very bad strategic decision for this year and the coming years."
Hardware Sector SpendingGartner revised its PC forecast from 4% growth to a 1% decline. All regions are expected to suffer spending declines, with Western Europe suffering the most. HDD shortages are only partially to blame.
Storage and ServersExternal controller based (ECB) storage spending and terabytes shipped will both suffer due to the floods in Thailand. Terabytes shipped in 2012 are expected to be at just 9% growth, compared to nearly 60% growth in 2010.
Enterprise Software SpendingGartner slightly lowered its software spending forecast from 7.5% to 6.4%. The individual software markets are responding very differently to the economic environment, preventing an across-the-board hit. The strongest growth areas will be security, virtualization, data integration and data quality tools.
Enterprise Software SpendingWithin software, 35% of revenue is from maintenance and technical support and an additional 12% is from subscription payments. Nearly half the forecast, then, will continue being spent as long as organizations continue to use what they've bought. While enterprises are cautious, they're still spending on tools that drive efficiencies.
IT Services SpendingThe services forecast, too, was only slightly reduced. Standing in the way of major growth are factors such as the economy and political stalemates that are making some companies more cautious about investing in IT. Consulting will be among the areas hardest hit.
2012 Telecom Spending Forecast Years ago, major growth was in the minor components of the traffic mix, while now it's in the parts responsible for the majority of traffic. Carriers will need to recognize a sustained challenge to build flexible and sustainable infrastructures, said Gartner's Peter Kjeldsen.
The Telecom ChallengeIn North America and Western Europe, developments in mobile service revenues are less rapid than the growth in mobile infrastructure spending. Carriers, said Gartner’s Kjeldsen, will need to keep an eye on costs and how they can leverage additional revenues into the business model.
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