Worldwide IT spend expected to hit $3.6tn in 2011

Worldwide IT spending will reach $3.6tn (£2.32tn) in 2011, up 5.1 per cent from 2010, according to updated figures from Gartner.

The analyst firm's latest Forecast Alert marks a 2.2 per cent increase on the previous estimates of a 3.5 per cent rise on last year.

However, report co-author Richard Gordon explained that 1.6 per cent of this increase can be attributed to the devaluation of the US dollar.

"We create this report using the US dollar as the basis for all our figures, so recent decreases in the value of the dollar when we convert from foreign currencies back to dollars increases the overall figure as a result," he explained.

Improving economic conditions around the globe, and an understanding that investment in IT can help deliver other cost savings, is having a continued impact on rising spending, according to the report.

The biggest growth area for the coming year will be telecoms equipment, which will rise by 9.1 per cent to account for $465.4bn (£300bn), while computing hardware and enterprise software will each grow by 7.5 per cent on the 2010 figures.

"As economies start to recover from the downturn of 2008 and 2009, spending is returning on technologies such as replacing hardware or updating software," Gordon said.

"The private sector is picking up now as the focus switches from cost savings to generating growth, but this is replacing spend that had continued in the public sector that is now slowing down."

However, Gordon noted that, while spending is set to increase worldwide, it is being driven mostly by regions outside western Europe and the US, as austerity measures imposed in countries like the UK hit spending in IT and other sectors.

"Areas like Asia Pacific and Latin America are seeing big spend on IT, but there is likely to be a period of five to 10 years of sluggish growth in Europe and the UK as IT spend is impacted, particularly among governments," he added.

"The US economy is more dynamic than Europe's, and should recover sooner. But issues around sovereign debt in the euro zone and the UK could mean that it takes a lot longer to pick up as governments cut spending."