Today IDC held their annual State of the Market IT & Economic Outlook 2012 conference call. In this annual web conference, IDC reviews the current state of the global economy and IT spending and provides outlook for the new year. This is my summary observations from that call.
IDC holds this call every year the first week of November and it signals to me that it is officially time for me to start focusing on developing my list of key trends for the next year. As I do every year, I’ll publish that list in early January.
The speakers on this call from IDC were;
- Stephen Minton, Vice President for the IDC Worldwide IT Markets research group, focusing on IT spending and global end-user trends.
- Anna Toncheva, Program manager and Economist with the IT Markets and Strategies group in IDC's Global Research Organization.
IDC stated that macroeconomic indicators have worsened over the past 6 months, causing a general weakening of the 2012 outlook. In general, we’ve seen good levels of IT investment so far in 2011, but with economic forecasts sliding down since mid-year, we should be concerned about IT spending in 2012. In addition, the European debt crisis is still lingering and threatening the very existence of the European single currency, leading us to ask…what would a double-dip recession mean for IT vendors?
IDC provided the following regional observations;
- Western Europe IT spending has softened, showing impact of debt crisis on business and consumer confidence. As a result GDP forecasts for next year have been scaled back significantly.
- The U.S. market has been resilient so far in spite of economic headwinds. There’s been some volatility in enterprise hardware and weakening PC sales, but software spending was strong in first half of 2011.
- Emerging markets (BRIC) are still strong and driving overall industry growth at 2x GDP.
- Mobile devices are also a major contributor to overall growth (global IT growth is 2.5% at constant currency excluding mobile this year)
IDC says that downside risks are still there and we all need to be aware of a downturn. However if the U.S. stays resilient and if stability returns to Europe, that should prevent an outright recession and IT spending crash. Therefore, IDC’s baseline assumption is that there will be no global recession in 2012. IDC does encourage and expect that all businesses will go through contingency planning for all types of IT capital spending/hardware upgrades including PCs, servers, and enterprise networks. IDC stated that project-based services will likely be more vulnerable than operational spending and while software spending has been very strong in 2011 it would not escape a downside scenario.
The bottom line is that IT buyers are still nervous, but IDC expects that their confidence should improve in coming months if the economy stabilizes.
For more information about this conference call, go to IDC’s website at State of the Market IT & Economic Outlook 2012 conference call.