We have just published Forrester's current forecast for the global market for information technology goods and services purchased by businesses and governments (see January 6, 2011, "Global Tech Market Outlook For 2012 And 2013"), and it shows growth of 5.4% in 2012 in US dollars and 5.3% in local currency terms. Those growth rates are a bit lower than our prior forecast in September 2011 (see September 16, 2011, “Global Tech Market Outlook For 2011 And 2012 — Economic And Financial Turmoil Dims 2012 Prospects"), where we projected 2012 growth of 5.5% in US dollars and 6.5% in local currency terms. I would note that these numbers include business and government purchases of computer and communications equipment, software, and IT consulting and outsourcing services equal to $2.1 trillion in 2012, but do not include telecommunications services.
These 2012 growth rates represent a slowing of growth from the 2011 rates, especially in US dollars: we are currently estimating the global tech market grew by 9.7% in 2011 in US dollars, and by 6.7% in local currency terms (though these may change as we get final 2011 data). The main reason for the slowdown from 2011 to 2012 is the deteriorating economic conditions in Europe, which we think will slip into a moderate recession of two to three quarters of declines in real GDP (if it didn't already decline starting in Q4 2011). As a result, the European tech market will fall in 2012 by 3.6% in local currency terms, though the weaker euro against the dollar means the drop in US dollars will be just -0.3%. The US tech market will see about the same growth rate in both 2011 and 2012 — 6.8% in 2011, 6.6% in 2012 (see December 20, 2011, “US Tech Market Outlook For 2012 — Slower Than Expected 2011 Spending Portends 6.6% Growth In 2012”). The Asia Pacific tech market will experience better growth in local currency terms as Japan recovers from the effects of the earthquake and the tsunami, though expected weakening of the Australian dollar, Indian rupee, and Japanese yen against the US dollar means growth measured in US dollars will slow in 2012 (look for a Forrester report on this market next week). Latin America and Eastern Europe, Middle East, and Africa will do even better.
Looking ahead to 2013, we see better growth emerging, with the global tech market increasing by 8% in US dollars and 6.9% in local currency terms. However, we did highlight the risks in our forecast, including the potential for the default of a major European country leading to the breakdown of the euro and a financial crisis, the US economy slipping back into recession as economic stimulus and consumer spending momentum fades, and the possibility of China and/or India experiencing a major economic slowdown. If any of these happen, the tech market outlook for 2012 would be revised downward to little or no growth; if two or more happened, the global tech market would decline in 2012.
In addition to the slowing of the global tech market in 2012 with recovery in 2013 and differences in regional tech market growth, the report highlighted six other themes that will define the global tech market in 2012 and 2013. These are:
- Exchange rates become a bigger factor in vendor plans.
- Vendors move beyond the BRICs.
- Large vendors struggle to manage the tech transition and will use acquisitions to keep up.
- Apple storms the corporate hardware market, leveraging consumerization of IT.
- Cloud and Smart Computing continue to drive software market growth.
- Technology shift bolsters demand for IT consulting services.