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August 19, 2005

IT Spending Will Hit $1.3 Trillion By 2009

Nicole Hemsoth

Worldwide IT spending will increase to $1.3 trillion by the end of 2009, with a compound annual growth rate (CAGR) of 5.9% from 2005-2009, according to IDC. Government, manufacturing, and banking will be the industries that provide the most attractive opportunities for IT vendors worldwide. Similarly, healthcare, as well as the communications and media industry, are expected to offer the highest growth potential.

“We remain optimistic about vertical market spending on IT,” said Anne Songtao Lu, program manager for IDC's Worldwide Vertical Markets research service. “In addition, both the consumer and communications markets have interesting dynamics and are worth watching closely.” IDC believes that with consumer spending on IT services, peripherals, and PCs experiencing double-digit growth, the potential within this market can outpace that within others over the longer term. Regarding the communication and media industry, Anne Lu notes that, “With its rebound, the sector's spending on IT is estimated to be $95 billion in 2005, and $128 billion by 2009. Growth within this market will be driven primarily by heavy investment in network equipment, PCs, as well as peripherals and storage.”

Other industries of interest also noted in the study include telecommunications and finance. Telecommunications firms are expected to make ongoing IT investments during the forecast period, which will be related to the roll out of more advanced services such as 3G, as well as the migration to IP-based core infrastructures. Financial institutions worldwide are also predicted to provide hot opportunities for IT vendors. IDC's Anne Lu explained that, “Core system deals will continue to spur IT spending within regional financial institutions. These infrastructure investments will also provide the impetus for additional spending around financial systems transformation. In addition, the various banking regulations throughout the regions will trigger a demand for end-to-end solution provisioning.”

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