Enterprise IT Spending in APAC to Top US$312 Billion in 2011: Gartner

by CXOtoday Staff    Nov 16, 2010

growthAsia Pacific enterprise IT spending is expected to rebound in 2010 with 10.6 percent growth, following a decline of 1.3 percent in 2009, according to Gartner (NYSE:IT). Enterprise IT spending in the region is forecast to reach US$312.3 billion in 2011, an increase of 7.6 percent.

“Growth in 2010 has been strong, due in part to pent-up demand following budget freezes in 2009 and the need to replace ageing hardware,” observed Peter Sondergaard, Sr. VP at Gartner and global head of Research

“Next year we see a slowing trend in Asian growth, but one that is unlikely to develop into something more problematic, and some countries, such as India and China, show no signs of slowing down. After some impact of the global financial crisis in 2009, growth in manufacturing and supply chain industries in China and India has picked up again in 2010,” Sondergaard further added.

During the forecast period to 2014, software will be the fastest growing segment (11.3 percent) in Asia Pacific, followed by hardware (10.1 percent), IT services (9.3 percent) and telecommunications (7.6 percent).

According to Gartner’s forecast, the healthcare sector followed by utilities and education are the vertical industries that will show the strongest growth in Asia Pacific until 2014, as the effect of government stimulus spending in those areas continues to be felt. The weaker U.S. dollar has significantly boosted dollar valued growth rates in the Asia Pacific region in 2010, making the rebound appear stronger.

Sondergaard expects that by 2012, the hardware spending in Asia Pacific will surpass that of North America. And while the region represents only 7 percent of the global IT services market, 16 percent of the contribution to market growth for 2011-2014 is expected to come from Asia Pacific.

Software will be the fastest growing segment in Australia during the forecast period to 2014, with a compound annual growth rate of 10 percent. The report stated that, currently Australia is the second largest software market in APAC after China, and projected to reach high single digit growth through 2014, supported by a consistent software maintenance revenue stream, strong vendor channel and strong service infrastructure.