US Tech Market Outlook For 2013 And 2014: Better Times Ahead

US CIOs remain torn between their need to invest in new mobile, cloud, and smart technologies and their fear of encountering economic doldrums (or worse). Over the past two and a half years, these counterforces have caused tech spending to wax and wane, leaving an overall record of modest growth. With economic concerns easing, US CIOs will give freer rein in 2013 and especially in 2014 to their investment plans for new technologies. This report details our forecast that business and government purchases of information and communications technology (ICT) goods and services will expand by 5.7% in 2013 and 6.1% in 2014, modest but real improvements from the 5.6% growth posted in 2012. This is not as bullish as our January 2013 projection (when we predicted 7.5% growth for US purchases excluding telecom services) because the federal budget sequester has weakened prospects for US economic growth this year. We're still betting that CIOs and their business partners can, should, and will pick up the pace of tech buying in 2013. We forecast weak spending on hardware (not for tablets) and telecom services, balanced by an improving outlook for software, especially software-as-a-service (SaaS) and analytical and collaboration apps; IT consulting and systems integration; and IT outsourcing.