Gartner Survey Sees IT Spending Increasing

SAN FRANCISCO (Dow Jones) -- While general economic trends are adding to concerns about business slowdowns and possibly recession around the world, a new survey by technology research firm Gartner suggests the market for technology spending is going to increase for at least the next three years.

The Gartner study said that worldwide spending on information technology products and services should rise 8% in 2008 to $3.4 trillion. Gartner analysts said much of the gain would come from a decline in the U.S. dollar, and that the growth rate in constant currency terms would be about 4.5%.

"The U.S.-led economic downturn shows no sign of causing a recession in IT spending," said Jim Tully, an analyst with Gartner. Tully also said that IT spending rates will slow down in the coming years, "but the fundamentals remain strong [as] emerging regions, replacement of obsolete systems and some technology shifts are driving growth."

Among those shifts are movements toward software being sold on a per-use, service-based model, and toward "cloud computing," in which information is stored on a server and any changes to that information are automatically made to devices that are linked into the cloud. An example of cloud computing is Apple Inc.'s MobileMe service.

The Gartner survey also said that IT should benefit from a cycle of product and technology upgrades that should run past the end of the decade, as the last sector-wide upgrade cycle occurred between 1997 and 2001.

Services and telecom products are expected to continue to dominate IT spending budgets, and together should account for $2.8 billion of 2008's IT spending and almost $3 billion in 2009. Gartner said hardware growth is being spurred on by PC sales, which make up about 60% of total hardware revenue.

Among big-name computer hardware and IT companies, Hewlett-Packard shares fell $1.29 to $44.30 Monday morning, while IBM gave up $1.02 a share to trade at $125.34, Cisco Systems was off by 6 cents a share at $24.85, and Microsoft shares rose 14 cents to trade at $27.94.

(END) Dow Jones Newswires

Posted to the site on 18th August 2008