Spending in Mideast and Africa to rise 7.7%

IT spending in the Middle East and Africa (MEA) region is expected to grow 7.7 per cent in 2010, while the global spending is projected to increase 4.6 per cent from last year's figures.

Gartner said global IT spending will reach $3.4 trillion (Dh12.4trn) in 2010, which is a slow but steady improvement in the macroeconomic environment.

Although modest, this projected growth represents a significant improvement from 2009.

All major segments (computing hardware, software, IT services, telecom, and telecom services) are expected to grow in 2010.

"Last quarter, we did not expect to see IT spending levels recover to 2008 levels until 2011, however, now, with the upward revision to the current dollar forecast, we are projecting that global IT spending this year will approach the level seen in 2008," said Richard Gordon, Research Vice-President at Gartner. "Our updated forecast for IT spending to reach $3.4trn in 2010 is actually a year earlier than we expected leveling our previous forecast update, and reflecting a bounce back in underlying IT spending from the sharp drop in 2009. While, this forecast might seem bullish at first, it's important to factor in the impact that exchange rates will have on the markets," Gordon said.

"Much of the increase in our revised 2010 forecast can be attributed to a projected decline in the value of the US dollar compared to 2009."

From a regional perspective, Gartner's IT spending forecast reflects the economic situation in each region and country with the emerging regions leading the way in terms of growth.

However, because of the scale of IT spending in North America and Western Europe, these regions weigh heavily in the IT spending growth rate overall.

IT spending growth in emerging markets (with the exception of Central and Eastern Europe and some of the Gulf countries) is expected to lead the way, with spending forecast to grow 9.3 per cent in Latin America, 7.7 per cent in the Middle East and Africa and seven per cent in Asia/Pacific. Recovery in Western Europe, the United States and Japan will start more slowly, with Western Europe increasing 5.2 per cent, the US growing 2.5 per cent, and Japan increasing 1.8 per cent.

"As we begin 2010, multiple factors are conspiring to shape IT spending patterns in years to come," said Gordon. "Although recovery will be slow, over the next 12 to 18 months, gross domestic product (GDP) is projected to increase, consumer confidence is expected to improve, and the availability of credit should increase.

"At the same time, pent-up demand for new technologies will be released as enterprises focus on new growth opportunities and increase spending plans. IT vendors and service providers must ensure they are poised to take advantage of this."

 

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