Tech spending was strong in 2011, despite sluggish economy

IT spending rose just 5 percent last year, but that small growth was seen in the face of economic problems across Europe and a hard-drive shortage, according to IDC.

Spending on technology around the world managed to rise last year, despite economic woes in Europe and a severe hard-drive shortage, research firm IDC said yesterday.

Overall, IT spending rose just 5 percent in 2011, but that proved to be a healthy gain in the face of worldwide challenges.

The 5 percent figure was calculated using constant currency, a method that does not take into account fluctuations in the exchange rate. In U.S. dollars, the picture was even rosier, with tech spending rising by almost 9 percent last year.

A surge in demand for smartphones, tablets, and software kicked in for the year, counteracting damage to the PC sector as a result of the hard-drive shortage . Emerging markets also boosted spending, with double-digit gains seen in Brazil, Russia, India, and China.

Smartphones took the top perch, in terms of spending, showing a 46 percent gain from 2010. Spending on software and disk storage systems each rose by 6 percent. Despite the sluggish economy, companies still spent their budgets on mobile devices, new software, and upgrades to their network infrastructure.

Europe has naturally proved to be a major trouble spot for technology spending.

IT investment was flat across Europe last year, with lower spending seen on PCs, servers, network and storage equipment, and peripherals. Any recovery across the continent is likely to take a while, with IDC projecting less than 1 percent growth this year and 3 percent in 2013.

Other regions have continued to compensate for the problems in Europe.

U.S. tech spending rose by 7 percent last year and is projected to grow another 5 percent this year. Japan should see a return to positive territory, following last year's tsunami and earthquake. And IT spending in Brazil, Russia, India, and China is predicted to grow by 9 percent, 11 percent, 16 percent, and 15 percent, respectively.

Looking at tech spending across the entire world, IDC is eyeing another year of 5 percent growth, with hardware and software spending rising by 6 percent and IT services by 4 percent.

Companies are expected to spend even more money on network and storage equipment to handle the ongoing surge in digital information. By the end of 2012, even the PC industry is likely to show positive growth once again, according to IDC.

But all that assumes that the global economy doesn't take a nosedive.

"There are risks to the outlook for 2012, mainly related to macroeconomic weakness in Europe, where IT spending is still weak," Stephen Minton, a vice president at IDC, said in a statement. "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."

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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