IDC predicts that
worldwide IT spending will grow 6.9% YoY to $1.8 trillion in 2012 and 20% of this total spending will be driven by
smartphones, media tablets, mobile networks, social networking and Big Data
analytics. Forrester research says IT purchases will be $2.042 billion in 2011
and $2.154 billion in 2012, with the growth driven mostly by underlying
economic growth and adoption of newer technology. Gartner forecasts IT spending
will be $3.7 trillion (7.6% YoY) in 2011 and expects the IT spending to reach
$3.9 trillion (4.6% YoY) in 2012. Gartner IT spending includes Telecom spend
and without telecom spend, total IT spend is $1.53 trillion (8.4% YoY) in 2011
and $1.62 trillion (6% YoY) in 2012.
IT spending and budgets did not see any cuts in 2011 but there
will be cuts in spending in 2012. There will not be any drastic cuts as IT
spending is critical for ongoing business success, but spend scrutiny
and conservative plans are expected. The worst case scenario of the total
unraveling of the Euro crisis is that the IT spending will increase by 1-2% YoY.
This growth will be driven by the emerging economies like India , China US
Hardware, Software, IT Services will see single digit growth
in 2012. Spends on these categories will be slow as companies will try to cut down
spend and will not go for up gradations aggressively. Only business critical
spend will be made. Mobile devices such as notebooks, tablets, and smartphones
will overtake the PCs. Mobile applications and operating systems revenues will
grow and will even surpass the mainframes revenues and the competition is
expected to intensify with major vendors like Microsoft, Amazon, Apple and
Google coming into market with new offerings.
Cloud Computing will become more competitive as all the
major vendors like Amazon, IBM, Microsoft, Google, etc are focusing on creating
application platforms and ecosystems. Not only these major vendors but also
Indian Outsourcing vendors are developing the cloud based offerings and
platforms and are aggressively marketing these to the clients. According to
IBM, the demand for cloud computing is on the rise as organizations look to
expand the impact of IT to deliver innovative services while realizing
significant economies of scale. IDC analysts expect that cloud spending will be
$36 billion next year. M&A is also expected in cloud space where the major
vendors look to buy smaller and medium players looking to add more applications
and content.
Social media is on the rise and it is expected to be
critical for the consumers as well as businesses. Businesses are looking for
social media tools that help them reach their customers, track their reputation
and feedback of the customer and use it internally in the organization to
interact with employees. Social media analytics is expected to be a big
business as the businesses look for tools and gain critical insights from these
tools to determine the effectiveness of their marketing programs, call center
performance and cross-selling initiatives. There have been acquisitions in this
segment where larger vendors are buying out smaller niche players with good
product and platform and integrate it in their core offerings.
According to IDC, Big Data is critical in 2012 as the volume
of digital content grows to 2.7 zettabytes (ZB), up 48% from 2011. More than
90% of this information will be unstructured (such as images, videos, MP3 files
and files based on social media and Web-enabled workloads) -- full of rich
information, but challenging to understand and analyze. 2012 is likely to be a
busy year for Big Data-driven mergers and acquisitions as large IT vendors seek
to acquire additional functionality. Business Intelligence and analytics key to
unlock the data and use the data in organizational decision making and strategy
formulations. Analyzing in real time is the future of analytics.
IT and BPO will also see growth in 2012. Clients will look
for offerings from vendors that will have significant impact on their
businesses. Vendors are adopting cloud computing and also offering end to end platform
offerings and are increasingly looking for outcome based offerings that will
increase their margins. Indian Outsourcing vendors are forecasting and
preparing for the volatile economic situation and are actively interacting with
clients on regular basis. As of now vendors are positive but they are expecting
definite headwinds in 2012 and are confident to tackle such scenario.
App stores with lot of new applications, intelligent devices
with sensors, tablets, and smart phones are being launched and these devices
and apps are creating new businesses and are adding more functionality and are
being actively integrated by the large vendors in their core product offerings.
2012 will see many new offerings in terms of hardware, software and services
and despite the tough and volatile economic environment, vendors will launch
them.
2012 will be a tough year and businesses and clients both
are cautious about the way that things will turn. The second half of 2011 was
supposed to be slow and budget/spending cuts were expected but there were not
any drastic cuts. There is a least possibility of a deep recession like the one
in 2008 but the down grades and the economic issues will take time for
resolving and this volatile economic situation is expected to continue in 2012.
Businesses are having strong balance sheets and financially strong but the
overall consumer confidence is low due to high unemployment rates and fall in
incomes. Emerging markets play a critical role for keeping up the growth and
how much these economies are affected by the Euro Zone debt crisis and US economic
slow down is also critical fact and these economies can always look for their
domestic market as the governments and businesses in these markets are
investing in IT for good governance and citizen services.
