IT spending to pick up mid-2010

NBN holds amazing potential for investment in telepresence and videoconferencing, say analysts

The impact of the National Broadband Network (NBN) on IT spending remains uncertain, but it holds amazing potential for technologies such as telepresence, say IDC analysts.

“If the NBN happens the way it’s supposed to, it will transform Australia,” said IDC analyst, Jean Marc Annonier. “It will allow businesses to do so much more and technologies such as video conferencing and high definition, which can be really powerful if you have the right network, will really come into their own.”

Australia has been in a much better position to weather the storm and the latest IT spending figures from IDC indicate the worst may be over. Spending in 2009 is tipped to grow 2.9 per cent and 3.9 per cent overall in 2010.

“It all depends on the international situation,” said Annonier, citing the performance of China and the US as key factors. “Provided those large economies do well, we foresee the pickup sometime in 2010 but when, exactly, is unknown. Probably sometime in the second half of the year.”

Hardware spending has been the most affected — buying cycles have become longer as businesses push the lifetime of their devices, aided by more powerful hardware. Typical refresh cycles now stretch to three or four years.

“But there are still opportunities for vendors who can provide value to the business,” Annonier said, particularly around business transformation. In 2009, most IT spending has focused around productivity.

“Virtualisation is really driving IT spending as companies seek to reduce servers and consumer less power and energy. We are also seeing virtualisation on the desktop and not just on the server side.”

Thin clients are finally reaching their long-promised potential, replacing desktops.

“In 2004, the concept was ready but the technology was not. Thin clients were not powerful enough and the software was not ready, ” Annonier said “But the use case has now moved from the task worker to the productivity worker. Thin clients themselves are more popular, not least because CIOs are becoming accountable for energy use.”

Software spending is also predicted to rise, as relatively flat growth throughout 2009 (mostly due to poor software sales among small enterprise) reaches 15.5 per cent in 2010. Solutions that drive supply chain management, such as customer relationship management (CRM) will continue to grow. Security and storage software will also remain strong.

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