Worldwide IT spending should top $3.4 trillion in 2008, up 8 percent from 2007, research firm Gartner is predicting.
But much of that growth is due to the decline in the U.S. dollar. When adjusted for currency issues, worldwide spending is predicted to grow only 4.5 percent.
Software spending and IT services are expected to see the biggest gain, up 10 percent and 9.4 percent respectively in 2008.
Analysts attributed some of the software growth to replacement cycles, but noted that "the replacement of systems does not automatically equate to new software market growth."
"Software as a service/cloud computing, service-oriented architecture/Web 2.0, and open-source software are causing huge changes to the software market," wrote Joanne Correia, managing vice president at Gartner in a research note. "Many of these factors are impacting market growth as enterprises replace assets with per-use services."
Hardware spending is expected to rise 7 percent in 2008, thanks to strong Asia/Pacific and Western Europe sales and a global shift to mobile computers.