With the release of a new Forrester Research report, it's apparent we will be looking out for growth in the global tech market of as much as 3.3 percent this year — with the U.S. market growing 7.5 percent.
The report, the "Global Tech Market Outlook 2013 to 2014," said that the continued recession in Europe and slow growth in Japan are downward pressures on the global projections. Additionally, the strong U.S. dollar is depressing growth if measured in that currency. If measured by local currencies, the global market will increase by a projected 5.4 percent this year.
7.2 Percent Next Year in the U.S.
Outside of Europe, where the economic conditions are leading IT departments to cut their budgets, tech spending is expected to grow by at least 5 percent. Asia Pacific will increase by 4 percent this year, and Latin America, Eastern Europe, the Middle East and Africa are projected to increase spending by a whopping 9 percent.
2014 also looks good for the non-European regions, with the U.S. at 7.2 percent, Asia Pacific increasing to 5.4 percent and Latin America, Eastern Europe, the Middle East and Africa again posting 9 percent. Overall global spending is projected for 2014 to be nearly double this year, hitting 6.1 percent.
Spending categories with the biggest growth rates, in the double digits, include software-as-a-service apps, mobile devices and tablets, analytics, big data and smart process apps. Expensive purchases like servers, routers, PCs, ERP and database management software, which normally are the biggest items, will grow at rates less than or equal to the general market.
Forrester's Global Tech Industry Wheel: Purchases of IT Products and Services in 2013
The 2013 through 2014 period, Forrester said, represents a “different pattern of tech market dynamics” than what we’ve seen in the just-completed year. Following the slow growth in 2012, the U.S. will drive the improving market, as will the growing demand in mobile, cloud and smart technologies.
The report said that the newer technologies are seeing growth spurts because those items were “squeezed” during the slow growth period from which the U.S. and other countries are now emerging, because they were seen as relatively non-essential. But, Forrester noted the new technologies are “highly desired” because of the potential for business transformation, such as utilizing big data or fully provisioning a mobile workforce. Therefore, the story this year and next will center around the feeding of that pent-up demand.
Software vendors are expecting to do better this year and next than their hardware counterparts, unless, the report said, “the vendor’s name is Apple or perhaps Lenovo.” PC makers essentially saw zero growth last year, server vendors actually saw a 4 percent decline and storage hardware only grew by about 2 percent. Forrester said the projected 4 percent growth rate for PCs this year is primarily due to the continuing appeal of tablets, which count in the PC category.
The projection is based on a few major assumptions, including the continuation of economic growth in the U.S., steps by the European Union to effectively deal with their economic issues and a renewed growth in China following a leadership transition.
The report expects CIOs to wait until next year before they are confident enough to begin spending substantially to replace aging servers, PCs, storage devices and peripherals. Even so, the report said the biggest growth in hardware spending will be for Linux, Android and Apple products, not those using Windows.
To get ready for this period of growth, Forrester advises CIOs to follow several principles in their plans for tech purchases. It recommends that IT departments “nudge open the spending spigots” this year with 5 to 6 percent growth, followed by bigger increases next year if the economy continues to improve.
Additionally, Forrester suggests, “this is no time to skimp on investing” in emerging technologies, especially since “it is likely that your competitors are busy buying them.”
- Adobe: IBM's Silverpop Deal Could Trigger 'Nightmare'
- It's Official: Forrester Says Campaign Marketing Is Dead
- A Beginner's Guide to Responsive Web Design
- Dream On Salesforce, SAP Prez Unimpressed by Your Threats
- Will EMC Dump Documentum?
- Hackers Use Viral Videos to Attack B2B E-Commerce Site
- Why Microsoft's Reign Will Continue