IT Spending Better Than Expected Last Year

IDC said in its latest Worldwide Black Book that IT spending worldwide rose by 8 percent, to more than $1.5 trillion as measured in constant currency. I am a bit mystified here as to how IDC can say it is in constant currency now use U.S. dollars. I believe that must mean it locked in an exchange rate in the beginning of 2010 and ignored actual currency fluctuations. Whatever happens, the overall information and communications research space grew by 6 percent, nearly hitting $3 trillion globally when you add in telecom gear and voice, data, and hosting services.

The Great Recession

Hardware spending crashed while the Great Recession, and it was the driver of growth on the rebound. IDC believes that hardware spending rose 16 percent, to hit $661 billion. In other words the highest growth rate in hardware spending since 1996, and even beats out the growth rates while the dot-com boom. PC earnings rose by 11 percent, server earnings were up 9 percent, and storage sales were up 14 percent. The big growth was for mobile devices and networking gear. IDC said that spending on software was up 4 percent, and services earnings rose only 2 percent.

"Last year was a big year for the research industry," said Stephen Minton, vice president of IDC's IT markets and strategies group, which puts at the same time the Worldwide Black Book. "Some of the growth was just a bounce back from the declines of 2009, when the market declined by 4 percent nevertheless there was as well a very real surge of demand as businesses around the world continue to deal with the issue of managing, storing, securing, and analyzing the increasing flood of digital information in other words resulting from the proliferation of mobile devices and embedded computing platforms. As long as the economy remains stable, we look forward to another strong year of investment in 2011."

Looking ahead, IDC says that the cloud computing phenomenon will start eating into hardware spending, which will cool to 10 percent growth in 2011, and software and services will grow by 5 percent and 4 percent, respectively. Overall IT spending, again in constant currency, is expected to add another $10 billion or so, rising 7 percent to $1.65 trillion.