IT Spending to Shift From Hardware to Software

by: Larry Dignan

IDC is projecting global IT spending will be $1.6 trillion in 2011, up 5.7 percent from 2010. But under the hood there are a few key shifts underway in cloud computing, social software and mobile apps.

According to IDC, hardware spending will remain strong, up 7.8 percent in 2011. However, the focus for the industry will revolve around software spending, which is projected to grow 5.3 percent in 2011 compared to 2010. In other words, IT spending growth will increasingly depend on software gains. Project based services will be up 3.5 percent in 2011 and outsourcing will grow at a 4 percent clip.

Another thread worth noting from IDC is that emerging markets will represent more than half of all new IT spending in 2011.

Among the other items in IDC’s crystal ball:

  • Spending on public cloud services will be up 30 percent in 2011 and small and mid-sized businesses will lead the charge.
  • Mobile will continue to be hot as devices like tablets and smartphones outnumber PC shipments in the next 18 months. PC vendors will scramble to catch up. IDC is also projecting nearly 25 billion apps will be downloaded in 2011, up from 10 billion in 2010.
  • Social business software will grow at an annual compound rate of 38 percent through 2014. Major software vendors are likely to acquire social business players.

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