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Gartner: Asia Pacific IT spending to make V-shaped rebound

Gartner: Asia Pacific IT spending to make V-shaped rebound

The IT industry is exiting its worst year ever both globally and in Asia Pacific, said Gartner Tuesday.

In Asia Pacific, IT spending is expected to grow by 5 percent to reach US$515.6 billion in 2010, said the research house.

While worldwide IT spending is on pace to decline 5.2 percent, the IT industry will return to growth in 2010, with IT spending forecast to grow 3.3 percent year-on-year to US$3.3 trillion, Gartner added.

Speaking at Gartner Symposium/ITxpo in Sydney today, Peter Sondergaard, senior vice president at Gartner and global head of Research, said that this represented a fast V-shaped recovery for IT spending in Asia Pacific.

"Emerging regions will resume strong growth," said Sondergaard. "By 2012, the accelerated IT spending and culturally different approach to IT in Asia will directly influence product features, service structures and the overall IT industry. Silicon Valley will not be in the driver's seat anymore."

However, growth varies considerably by country, vertical market and IT sector. Sondergaard said that while software is estimated to post the strongest growth in Asia Pacific, telecommunications still represented the largest area of IT investment.

While IT spending will increase next year, Gartner cautioned IT leaders not to be overly optimistic.

"While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," said Sondergaard. "2010 is about balancing the focus on cost, risk, and growth. For more than 50 percent of CIOs the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011."

[Survey: CFOs to spend on existing systems for cost savings]

Sondergaard said that the three most-searched terms by Gartner clients on gartner.com provide some clues as to the priorities of IT leaders around the world. Cost remained the most-search term during 2009, although it peaked in May, followed by cloud computing.

"Next year will be the year when cloud computing moves from the discovery phase to small pilots, as part of organizations' desire to move from owned to shared IT," he said.

The third most-searched terms on gartner.com were business applications such as ERP and CRM. "We believe that 2010 will see increased focus on optimization of business processes linked to software applications, what we call application overhaul. That is what will drive growth in the software segment," Sondergaard said.

Sondergaard said three additional topics that were important in 2009 will continue to dominate IT leaders' agendas in 2010. These three topics include:

- Business intelligence -- Users will continue to expand their investments in this area with the focus moving from "in here" to "out there"

- Virtualization -- IT leaders should not just invest in the server and data center environment, but in the entire infrastructure. In 2010, users will create the cornerstone for the cloud infrastructure. They will enable the infrastructure to move from owned to shared.

- Social media -- Organizations are starting to scale their efforts in this space. The technologies are improving and organizations realise this is not only about digital natives. It's about all client segments including the most significant: the population in the next 10 years, the above 60 year old generations.

Sondergaard also highlighted three themes that will become important over the next few years. They include:

- Context-Aware Computing -- organisations will use information about customers to improve the quality of the interaction. Emerging context-enriched services will use location, presence, social attributes and other environmental information to anticipate immediate needs, offering more sophisticated, situation-aware and usable functions.

- Operational Technology (OT) -- OT is devices, sensors, and software used to control or monitor physical assets and processes, such as manufacturing systems and . The rapid growth of OT is increasing the need for a unified view of information covering business process and control systems. OT will become a mainstream focus for all organisations.

- Pattern-Based Strategy -- Organisations will need to proactively seek, model and adapt to leading indicators, often termed "weak" signals, that form patterns in the marketplace, and to exploit them for competitive advantage.

Pattern-Based Strategy will allow an organisation to not only better understand what's happening now in terms of demand, but also to detect leading indicators of change, and to identify and quantify risks emerging from new patterns rather than continuing to focus on lagging indicators of performance.


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