IT Spending to Skyrocket by 2010

LONDON, ON -- Annual U.S. enterprise spending on Information Technology (IT) operations and acquisitions will reach $US 1.033 Trillion in 2010, largely driven by acquisition spending on storage technology and software, a new study from Info-Tech Research Group's Indaba Division reports. Total non-consumer IT spending this year is expected to increase by 5.24 per cent from $US 840 Billion to $US 884 Billion. The study reveals a trend for higher growth in acquisitions spending led by large enterprises, given reduced operational costs from offshore outsourcing.

"Investment in IT infrastructure and operations by four dominant sectors – business services, financial services, government and manufacturing – will drive IT spending at a compound annual growth rate (CAGR) of 5.32 per cent annually through 2010," said Michael O'Neil, managing director, Info-Tech Research Group Indaba Division. "This kind of spending in key sectors bodes well for IT storage equipment and software vendors poised to meet healthy demand in those areas."

Of the overall enterprise IT expenditure of $US 1.033 Trillion in 2010, $US 625 Billion will be allocated to operational spending and $US 408 Billion to acquisitions. Comparing growth rates for operations and acquisitions, large enterprises will lead a trend to higher growth in spending on acquisitions due to two factors: outsourcing of operations -- especially offshore outsourcing -- which reduces operational spend, and accelerated investment in core technologies that enhance competitiveness.

"The adoption of offshore outsourcing by large enterprises within U.S. industrial sectors has had a major impact on how their IT budgets will be allocated going forward," said O'Neil. "Clearly large enterprises can now focus on acquiring advanced technologies to enhance their bottom line productivity and profitability due to operational savings from outsourcing. Again, this is good news for high-tech equipment and solutions providers marketing to large U.S. firms."

Info-Tech Research Group