Global tech market growth stabilising :Gartner

Thursday, 12 July 2012 03:34 - - {{hitsCtrl.values.hits}}

Reuters: Growth in technology spending by companies and the public sector is stabilising at much lower levels than last year, due to economic worries in many key markets, research firm Gartner said this week.

“While the challenges facing global economic growth persist ... the outlook has at least stabilised,” said Richard Gordon, research vice president at Gartner, noting anxieties linked to the euro zone crisis, weaker U.S. recovery and the slowdown in China.

Gartner now expects global IT budgets to rise 3.0% this year to $3.6 trillion, instead of a previously forecast 2.5% gain, but in constant U.S. dollar terms its forecast is unchanged at 5.2%.

That compares with a 7.9% rise in spending in the sector last year, Gartner said, with growth slowing in all five parts of the sector: computing hardware, enterprise software, IT services, telecom equipment and telecom services.

For the $1.7 trillion telecom services market - single largest component of the sector - growth will slow to 1.4% this year from 6% seen in 2011, Gartner said.

Worries over corporate technology spending came to the fore on Friday when software maker Informatica Corp posted results far below expectations, saying business conditions worsened sharply in June.

Informatica shares dived 30%, dragging down other tech names exposed to corporate tech spending including Citrix Systems Inc, EMC Corp, Red Hat Inc and VMware Inc.

Some investors worry that Informatica’s results could signal the European crisis is taking a higher toll on tech spending, than they previously thought.

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