IT spending to grow 4.9% this year against 5.6% recorded in 2012: IDC

Infotech Lead India: Global IT spending is likely to grow 4.9 percent this year against 5.6 percent growth recorded in 2012, according to IDC.

Worldwide IT spending is forecast to reach $2.06 trillion in 2013.

Worldwide ICT spending, which includes telecom services spending, will increase by 4.5 percent to $3.7 trillion.

The 4.9 percent projected IT growth in 2013, according to IDC, will be down from the previous forecast of 5.5 percent growth.

IDC lowered the IT spending forecast on account of economic uncertainty surrounding the U.S. government, European debt crisis, and weakening GDP in China.

The IT research agency says many IT vendors are reporting difficulty in closing deals at the end of Q1 2013.

The strength of the U.S. dollar may continue to have an adverse impact on the reported revenues of U.S.-based IT vendors.

In 2012, IT spending increased by 2.9 percent in U.S. dollars, a significant downturn from 9.5 percent U.S. dollar growth in 2011.

The reduction in IDC’s forecast for 2013 is driven by deteriorating PC shipments since the second half of 2012.

IDC now expects PC spending to decline by 3 percent in constant currency this year, representing a third successive year of declining PC revenues. The shift to mobile devices remains a key driver for overall tech spending growth.

Excluding mobile phones and tablets, worldwide IT spending increased by only 2.8 percent in 2012 and is forecast to grow by 2.6 percent this year. Worldwide spending on smartphones will increase by 17 percent in 2013 while tablet spending will grow by 32 percent.

The combined growth rate for PCs and tablets, meanwhile, will remain stable in the range of 4-5 percent.

Software spending in the U.S. grew slightly slower than forecast in 2012, and IDC has consequently reduced the U.S. software forecast to 6 percent growth for 2013 (from 7 percent).

IT services demand remains stable, but the pass through from capital spending and software deployment remains tepid by historical standards. IDC now forecasts growth of 5.6 percent in worldwide software spending in 2013 (constant currency), and 3.8 percent in IT services.

Meanwhile, the report suggests a decline in overall server revenues while storage infrastructure spending will cool somewhat after the major spending cycle of 2011/2012.

IDC projects 2.4 percent growth in worldwide storage hardware revenues this year, down from 6.1 percent growth in 2012.

Network infrastructure investment was strong in 2012, as many carriers invested in the deployment of LTE networks, but this will also cool in 2013. Service provider spending on network equipment will increase by 1.1 percent this year, compared to 5.8 percent in 2012.

Enterprise network spending should remain more stable, projected to post growth of 6.8 percent.

Emerging markets are the engines of growth for worldwide IT spending, with strong trends continuing in markets such as India and Brazil in recent months.

The weakest performing geographies will be Western Europe and Japan, where slow economic growth is inhibiting IT spending while the U.S. market remains fragile in the context of political uncertainty.

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