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5 Areas That Will Drive IT Spending

We're a bit more bullish about 2012 than Gartner, which recently revised its spending forecast downward.
Gartner is getting cold feet on its original forecast for worldwide IT spending, ratcheting it back to 3.7% growth in 2012 from its earlier forecast of 4.6% growth. Gartner's reasons: slowing global economic growth, the eurozone crisis, and the impact of Thailand's floods on the production of hard disk drives. When assessing IT spending, doesn't anyone ask the folks who manage IT budgets anymore?

InformationWeek did, for our Outlook 2012 report, for which we surveyed 605 IT professionals in October. We didn't home in on a percentage increase in total IT spending for the coming year, but we did find evidence that companies are a bit more bullish this year than they were last year. (Gartner's revised forecast is less bullish, as it estimates that worldwide IT spending in 2011 rose a robust 6.9%.)

In our survey, 18% said their companies will increase their IT spending by more than 10% in 2012, compared with 15% who said that last year, while the percentage of companies looking to spend between 5% and 10% more this year was down, to 24% from 27%. Companies looking to spend more on IT this year--but less than 5% more--is up slightly, to 14% of respondents this year from 13% last year.

Overall, 56% of the respondents to our recent survey said they expect their companies to spend more on IT this year than they did last year, while only 16% expect their IT spending to decline. They expect to do some IT hiring as well: 25% of respondents to our Outlook 2012 survey said their companies plan to hire more IT pros this year, while only 9% expect cutbacks. Still, 30% of respondents expect their companies to freeze IT hiring this year, while 36% are hiring only to fill vacated positions. So cautious optimism prevails.

One big difference between Gartner's outlook and ours: Theirs is global; ours is U.S.-oriented. And while Gartner and other IT spending prognosticators rely heavily on economic trends (GDP growth, industrial activity, monetary stability) and the financials of bellwether companies (Oracle, Cisco, Microsoft, IBM, and the like), we stick close to the source of IT spending: the people who actually manage those budgets.

And what they're telling us, as part of our extensive surveys and reporting, is that five core areas will drive their companies' IT spending higher in 2012:

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>> Mobile. Just since the beginning of the year, two high-profile organizations--Wal-Mart and the Financial Times--have acquired application development companies to bolster their mobile expertise specifically, as customers increasingly access their products from smartphones and tablets. Plenty of other companies are scurrying to access mobile talent by hiring specialists or working with contractors--or doing both.

>> Big Data. As CKE Restaurants CIO Jeff Chasney argues in an InformationWeek column on the subject, big data analytics isn't an out-of-the-box software "solution." Companies will need to hire or contract people with chops in math and statistics, in addition to buying the latest software tools.

>> Cloud Computing. As I noted in "Top 10 CIO Priorities," most companies aren't leaping into the cloud, but they are spending more on select software and infrastructure services. The real enterprise spending will happen when companies rearchitect their data centers for cloud-like private services, much like FedEx has done.

>> Data Center Infrastructure. Virtualizing servers and storage and updating data centers to be more redundant, energy efficient, and automated will require companies to spend more money to save money. And the growth of both public and private cloud services will force providers to make big data center investments.

>> Social. Companies under financial pressure (and who isn't?) must decide whether social networking is a core IT investment or just a nice-to-have. Through 2012, Gartner predicts, more than 70% of IT-dominated social initiatives will fail as IT pros "struggle with shifting from providing a platform to delivering a solution." Nonetheless, the stakes are high, especially for retail and other companies whose customers practically live on social media. Even B2B companies must come to grips with the fact that their customers are talking about them and their products on some form of social media, and their employees increasingly want to collaborate on social-like platforms.

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