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The “Great Thaw” of 2010 — IT Spending Gathering Steam

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Finally, some good news for the battered tech industry: The Big Chill is over. According to both Forrester and Gartner, IT spending in 2010 will continue to thaw, with Forrester expecting 8.4% growth in the U.S. and Gartner predicting 5.3% growth worldwide. Though anticipated spending levels are hardly what I’d call “sizzling” compared to years past, after the IT spending freeze of 2008-2009, vendors and end-user organizations alike are no doubt happy to embrace a low, yet steady simmer.

Both research firms expect hardware spending to lead the charge. Here are some highlights from the research, as reported by Network World:

  • In the U.S., computer equipment spending will see the largest rebound—around 11%—due to “replacement of old PCs, servers, and storage equipment.” (Forrester)
  • Software spending in the U.S. will also see a healthy gain of 10.5%, resulting from deferred license purchases from the 2009 capital freeze, continued growth in the SaaS market, and other technologies such as SOA, virtualization software, and analytics. (Forrester)
  • In the U.S. IT consulting services will grow at around 7%; IT outsourcing will trail the pack, with expected growth of only 3.8%. (Forrester)
  • Consumer PC spending will account for around a third of the growth in hardware spending, driven in large part by mobile PCs; an additional ten percent of the gains in hardware spending will be fueled by Windows 7 migrations. (Gartner)

The great news for IT asset management vendors like us is that Gartner expects particularly strong growth in the ITAM market—presumably because organizations will look to adopt tools and best practices for managing newly-deployed hardware and software alongside their existing assets.

Whether or not you put much stock in analysts like Gartner and Forrester, it’s increasingly clear that the technology market is staging a turnaround. Our own anecdotal evidence suggests that 2010 will prove to be a strong year; for example, in the first quarter of this year we rang up more than twice the new customer revenue and nearly quadruple the number of new customers compared to the first quarter of 2009. Additionally, we’ve seen the re-emergence of more price-sensitive small- to mid-sized customers that presumably back-burnered their strategic IT initiatives during the downturn, as well as a shift in interest from subscription-based pricing (which involves a lesser up-front investment but costs more over the long haul) back to our more traditional perpetual license model.

This suggests to me that we can all breathe a collective—albeit somewhat cautious—sigh of relief that the worst is likely behind us.