The research and analyst firm originally forecast growth to be in the area of 4.9 per cent, but revised its figures down to account for the perceived impact of the economic downturn in China and sluggish recovery in other parts of the world. Nevertheless, core IT spending is looking to rise above the $2tn mark for the first time.
“With the economic outlook uncertain for the second half of this year, we remain focused on the downside risks associated with China and Western Europe,” said Stephen Minton, vice president in IDC’s Global Technology & Industry Research Organization (GTIRO). “IT spending in Europe remains tepid by any historical standards, with overall growth of two per cent driven entirely by mobile devices. Excluding phones and tablets, IT spending in Western Europe will in fact decline by 0.4 per cent this year.”
According to the firm international IT spending will largely be buoyed by spending on mobile devices, which is expected to grow by 18.5 per cent globally, and tablets, which is projected to increase by 39 per cent. On the other hand, global PC sales are projected to decline by 7.2 per cent globally in 2013 – much more than the 2.6 per cent decline originally projected for this year, which underscores a growing trend that sees enterprises adopting IT solutions which fit better with mobile productivity needs.
Interestingly the firm’s figures show that by 2017 mobile devices aren’t forecast to accelerate total IT spending, suggesting that by that point mobile devices will hit parity with servers, storage, and other elements that were previously the drivers of IT spending.
Traditional hardware vendors that don’t have their hands in the mobile or tablet space will likely have a harder time in 2013 than previously estimated, with growth continuing to decline in the server (3.5 per cent down) and only minimal growth expected in the hardware storage market (1.9 per cent up).
“Average price declines in the server and storage markets continue to pressure margins and revenues, while some of the pent-up demand which drove the 2010-2012 rebound has given way to a more subdued environment for capital spending,” said Minton. “There are still pockets of growth, but overall hardware investments are in a cooling phase, which will last until 2014 at the earliest.”
Spending on software appears to be holding steady with 5.5 per cent growth expected for 2013, and the firm says that Software as a Service is playing a key role in the resiliency of that sector of the IT products and services market – to the point where it’s eating into the outsourced services market.
“Enterprises are still investing in new software tools and solutions, especially where rapid cost-benefits have been identified, but more software sales are migrating to SaaS and PaaS delivery models,” Minton said. “Not only does this put pressure on software vendors to compete with lower-margin cloud software providers, but the growth of cloud is also cannibalizing revenues from IT outsourcing and application hosting.”
SaaS is generally recognised as the most popular group of cloud-based services out there, and by the end of 2013 IDC expects almost ten per cent of annual software spending will be on software as a service solutions.