Despite some worries about consumer spending habits, financial analyst groups Gartner and IDC both see hope in tech industry spending for 2011. Both firms have released reports painting a positive portrait of 2011, thanks in large part to cloud computing spending and growth in mobile apps.
IDC predicts upwards of $1.6 trillion in tech spending, a 5.7% rise in spending on the sector in 2010 and a doubling of the rise seen this year over 2009. A Network World report says that IDC expects mobile computing, social networking technologies and cloud services especially to mature in the coming year, fulfilling much of the promise of promising stocks in 2010 like Google (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and others.
IDC senior vice president and chief analyst Frank Gens sees 2011 bringing about the crucial transformation essential in driving growth in the Internet Technologies industry, namely the shift from the early adoption of technologies to mainstream adoption. This will be driven by the widespread embracing of handheld technologies like smartphones and tablets from manufacturers like Motorola (NYSE: MOT), Samsung, Research in Motion (NASDAQ: RIMM), and Apple, as well as continued growth in software driven by Google’s Android operating system. These platforms, as well as the burgeoning app software market, will fuel IT spending in 2011 in a big way. IDC predicts that shipments these non-PC mobile devices will outnumber PC shipments by mid-2012 and bring around 25 billion app sales by the end of 2011.
The group is also predicting that the long-expected dividends from investment in social networking software and other services will arrive following a period of major consolidation in 2011, as companies begin to acquire smaller social technology companies and the use of social platforms to promote small and medium-sized businesses grows by 40%. Spending on cloud services by businesses of all sizes is also expected to grow by 30% as the technology becomes more widespread.
Gartner’s expectations for IT spending are slightly less optimistic than IDC’s, but strong nonetheless. The group is predicting 2.9% growth in enterprise IT spending in 2011, and though they’re advising their clients to expect even stronger spending, they should be prepared for unexpected stagnation. After all, it is possible leveraging social network tools for marketing will cease to be as effective in 2011 if consumers suddenly shift away from Facebook and Twitter to an unknown platform.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
