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Gartner slashes IT spending forecast

Government spending still hit by austerity measures

Analyst Gartner has slashed its forecast for worldwide IT spending growth for 2012.

Gartner now estimates worldwide IT spending will reach a total of $3.7 trillion this year, which is a modest 2.5 percent increase from 2011. The predicted increase is well down from the 3.7 percent growth previously forecast by Gartner.

"Despite ongoing concerns about the global economic recovery early signs in 2012 suggest that the global economic outlook has brightened a little," said Gartner analyst Richard Gordon.

Gartner said IT spending in the government sector is expected to "contract moderately" on a global basis in 2012 and 2013, driven by austerity measures in the eurozone. US government spending is expected to be "flat" in 2012 before contracting in 2013.

In the small and midsize business market, which represents around a quarter of the enterprise IT market, said Gartner, spending is forecast to reach $874 billion in 2012 and will grow to $1 trillion by 2016. Throughout the forecast period, midsized business IT spending will outperform other sectors in each of the next five years, driven by growth in spending on enterprise software, Gartner said.

The worldwide telecom equipment market is forecast to show the strongest growth with spending reaching $472 billion in 2012, a 6.9 percent increase from 2011. Gartner attributes this growth to the continued health of the mobile device market, as well as a more positive outlook for enterprise network equipment, including application acceleration and security equipment.

Last month, at a TechAmerica event delegates were told US government agencies will have "tight" IT budgets over the next 12 to 18 months, but that opportunities for small IT vendors existed, as many agencies are dividing contracts into smaller chunks - reflecting thinking in the UK government too.

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