Gartner forecast reinflates IT spending balloon

Cloud cash promised

By Timothy Prickett Morgan, 30th June 2011

For the second time this year, the prognosticators at market researcher Gartner have revised upwards their IT spending projections for 2011, and now are calling for a spending increase of 7.1 per cent worldwide, to $3.67 trillion.

Hardware is hot, hot, hot. Despite a slowdown in PC spending, corporate budgets are going gangbusters on server, storage, and network gear, and Gartner now reckons that companies the world over will spend $419bn on various kinds of hardware, including PCs and tablets – that represents an 11.7 per cent increase over last year's $375bn in spending.

That's a bit cooler than the 12.1 per cent growth in global hardware spending in 2010, but not as cold as the 9.5 per cent growth Gartner was predicting back in March for this year.

Gartner has also revised what it thought was spent on enterprise software in 2010, up from $237bn back in its March projection to $244bn in the projection announced on Thursday, which making the compares a bit tougher. That said, Gartner thinks that companies will now spend $13bn more on software this year, which puts growth at 9.5 per cent even with this tougher compare.

The wizards at Gartner also now think there was more spending on services last year, at $793bn worldwide. And the company expects that spending on IT services will increase by 6.6 per cent to $846bn. That's nearly 2 points more growth than the March forecast.

Telecom expenses still represent the bulk of IT spending, and will grow by 6.9 per cent to $2.14 trillion this year.

With all of the hype about clouds – and a generous, ever-widening definition of what constitutes a cloud – you'd expect that spending on cloudy compute, storage, networking, and application serving would be exploding. And, according to Gartner, it is – cloud spending is growing four times faster than IT spending overall.

Gartner pegs worldwide public-cloud spending at $74bn in 2010, about 2 per cent of overall IT spending, and projects that it will rise by 20 per cent to $89bn this year. By 2015, global public-cloud spending will nearly double to $177bn, says Gartner, and represent around 5 percent of total IT spending on Planet Earth.

Similarly, within that software spending, about $10bn was ponied up for software as a service (SaaS) applications, which is about 10 per cent of total enterprise application spending. By 2015, Gartner forecasts that this will double to around $20bn, comprising about 15 per cent of app spending. ®

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Posted Friday 1st July 2011 06:50 GMT

alwarming

If you are not refreshing datacenter, you are (probably) losing money.

According to a 2007 survey, in 3 years data centers spend more on power/cooling than the equipment it supports! In reality, probably 4 years is more like it.

Recent CPUs (like sandy bridge) have brought down their heat signature as well as power requirements while nearly doubling the performance. Add virtualisation and you can halve the average power requirement again (if not the peak time load). So basically the investment pays off for itself in a couple of years.

Plus, it will save on real estate cost if the load goes up beyond current data center's physical size. One of the problems is that a bunch of netbursts are still running stuff and no one wants to touch it. Probably 10 of them can be replaced by a 1U Xeon today (just guessing).