Worldwide IT spending is expected to rise 7 per cent in 2003 although significant gains probably won't be seen until the second quarter of next year, according to a report released yesterday by Dataquest at the Gartner Symposium/ITxpo 2002 conference being held here this week.
Spending increases will most likely occur with "shorter-term, less strategic items" such as PCs, low-end servers and infrastructure software "that can help deliver more value out of systems and networks", said George Shiffler, principal analyst for Gartner Dataquest's computing platforms and economics research. Although 47 per cent of respondents said they don't plan to increase IT spending next year, 41 per cent said they do. Overall spending increases will be driven by fixed and mobile telecommunications services, which are expected to rise 7.5 per cent in 2003 to $US1.445 trillion as companies continue to focus on core operations and look to reduce their head counts. If telecom services were removed from overall IT spending projections, total IT spending would actually show a 0.5 per cent drop in 2002 instead of the 3.4 per cent gain that Dataquest is projecting.
Worldwide spending on hardware and systems is projected to decline 1.3 per cent for this year but rise 4.8 per cent in 2003 to $US338.8 billion as the PC market braces for a widely anticipated replacement cycle to occur. Meanwhile, price competition continues in the server market, as companies follow a trend toward buying lower-priced boxes, according to the report.
The IT services market is on course to grow 7.1 per cent in 2003 compared to just 2.8 per cent this year. The rise will come about because companies are increasingly leaning toward outsourcing non-core transaction processing functions with an eye towards reducing costs.