Information Technology Spending Expected to Hit a Record $3.6 Trillion in 2012

The economy has not been very good lately. Duh? And I don’t mean just in the USA, but in Europe and the rest of the world. There are a couple of industries that haven’t been hit hard by the global economic downturn: Information Technology (IT) and Telecommunications. Because I happen to be involved in both of these industries, I am always interested in keeping an eye on what’s happening in IT and telecommunications, especially in today’s economic conditions.

As the world turns to cloud computing and the $1.7 trillion telecommunications industry is cruising around like there was no such thing as a slow economy, the IT spending is going nuts. Okay, so may be it’s not going nuts but it sure is increasing at a faster rate than expected.

Here’s what the industry analysts at Gartner Research are saying. If you are not familiar with Gartner, they are the world’s leading IT research and advisory company. They have 1,280 research analysts and consultants. They are like the E.F. Hutton of IT because when Gartner talks, people listen. If you don’t know E.F. Hutton you’re too young. Don’t worry just keep on reading. According to Gartner, the world will spend $3.6 trillion on IT in 2012. This is 3% higher than what was spent in 2011. One of the main reasons given by Gartner for this increase is that spending on cloud services is expected to go up from $91 billion in 2011 to $109 billion this year. That’s about a 17% increase. In fact, Gartner is predicting that it will go up to $207 billion by the time your 15 year old kid graduates from high school in 2016. That will be about 44% increase in spending on cloud services from 2011 to 2016. Microsoft didn’t jump on the cloud computing bandwagon until the last couple of years but now Microsoft is pouring money and resources in cloud services. According to a 2011 post on Bloomberg.com, Microsoft was planning to spend $8.64 billion of its $9.6 billion annual Research & Development (R&D) budget on cloud computing. That’s 90% of it’s R&D budget. Are you kidding me?

Besides IT, the telecommunications industry is another area that has experienced decent growth. According to Gartner, telecommunications spending is going to go up $1.69 trillion this year, an increase of 1.4% from 2011. Although telecommunications and IT compliment each other in certain ways and Gartner says that IT consulting is in great demand, telecommunications spending is by far the hottest ticket in town.

As an instructor and a consultant, I believe Microsoft SharePoint is one of the reasons why IT business has been booming in today’s economy. Microsoft Office 365 and SharePoint online (which is also offered as part of Office 365) are part of the cloud computing push and considering the fact that Microsoft is investing so heavily in R&D, the future for IT industry looks good.

For more information, check out this New York Times blog post.