Gartner Says Asia Pacific Enterprise IT Spending to Reach US$367 Billion in 2012

Kuala Lumpur, 17 November, 2011 — Spending on information technology (IT) products and services by enterprises in Asia Pacific is expected to grow 8 percent to exceed US$367 billion ($A345.7 billion) in 2012. In Malaysia, enterprise IT spending is forecast to reach MYR 31.5 billion in 2012, up 6.1% over 2011. Singapore, Korea and Hong Kong are forecasted to each reach S$18.3 billion in 2012, up 4.1% over, KRW 49.7 trillion in 2012, up 3.1% over 2011 and HK$90 billion in 2012, up 5.5% over 2011

However, the bulk of this growth comes from developing markets like China and India, as businesses in mature markets are increasingly cautious.

Peter Sondergaard, senior vice president and global head of research at Gartner, provided the company’s latest outlook for the IT industry today to an audience of 1,500 CIOs and IT leaders at Gartner Symposium/ITxpo at the Gold Coast Convention Centre.

“Our outlook is made with the assumption of continued global economic uncertainty, and at best, sluggish growth - especially in the United States, Japan, and Western Europe,” Mr. Sondergaard said. “The European financial crisis is extremely serious. Some well-respected economists now predict a shrinking Eurozone economy in 2012.

Worldwide enterprise IT spending is projected to total US$2.7 trillion in 2012, a 3.9 percent increase from 2011 spending of US$2.6 trillion, according to Gartner, Inc.

While growth is slowing (from the expected 5.9 percent increase in 2011), analysts said it’s important to note that despite global economic challenges, enterprises will continue to invest in IT.

“The days when IT was the passive observer of the world are over. Global politics and the global economy are being shaped by IT,” Mr. Sondergaard said. “IT is a primary driver of business growth. For example, this year 350 companies will each invest more than $1 billion in IT. They are doing this because IT impacts their business performance.”

Mr. Sondergaard said two-thirds of CEOs believe IT will make a greater contribution to their industry in the next 10 years than any prior decades.

“For the IT leader to thrive in this environment, IT leaders must lead from the front and re-imagine IT,” Mr. Sondergaard said. “IT leaders must embrace the post-modern business, a business driven by customer relationships, fueled by the explosion in information, collaboration and mobility.”

This new era brings with it urgent and compelling forces, Mr. Sondergaard said. They include mobility, the cloud, social, and an explosion in information.

“These forces are innovative and disruptive just taken on their own, but brought together, they are revolutionising business and society,” Mr. Sondergaard said. “This nexus defines the next age of computing. To understand this change, you must appreciate each of the forces.”

Mobile.
The shift to mobile is almost overtaking many IT organisations that can’t move fast enough to catch up. Mobile is not a coming trend. It has already happened. In 2010, the installed base of mobile PCs and smartphones exceeded that of desktop PCs.

Less than 20 million media tablets, such as the iPad, were sold in 2010, but by 2016, 900 million media tablets will be purchased – one for every eight people on earth. By 2014, the installed base of devices based on lightweight mobile operating systems, such as Apple’s iOS, Google’s Android, and Microsoft’s Windows 8 will exceed the total installed base of all PC-based systems.

“That’s incredible change, not only for individuals. It requires IT to re-imagine the way it provides applications,” Mr. Sondergaard said. “By 2014, private app stores will be deployed by 60 percent of IT organisations. The applications themselves will be redesigned – they will become context-enabled, understanding the user’s intent automatically. Mobile computing is not just the desktop on a handheld device. The future of mobile computing is context-aware computing.”

Cloud.
The cloud combines the industrialisation of IT capabilities and the disruptive impact of new IT-led business models. However, the shift away from traditional IT acquisition models to public cloud services is still in the very early stages. For example, Gartner estimates that while US$74 billion was spent on public cloud services in 2010, that only represented 3 percent of enterprise spending. However, public cloud services will grow five times faster than overall IT enterprise spending (19 percent annually through 2015).

“What supply chain models did to manufacturing is what cloud computing is doing to in-house data centres. It is allowing people to optimize around where they have differentiated capabilities,” Mr. Sondergaard said.

Social.
The next stage of social computing is about mass-customer, mass-citizen, and mass-employee involvement with enterprise systems.

“With 1.2 billion people on social networks, 20 percent of the world’s population, social computing is in its next phase,” Mr. Sondergaard said. “IT leaders must immediately incorporate social software capabilities throughout their enterprise systems.”

Information.
The concept of one enterprise data warehouse containing all information needed for decisions is dead. Multiple systems, including content management, data warehouses, data marts and specialized file systems tied together with data services and metadata, will become the “logical” enterprise data warehouse.

“Information is the oil of the 21st century, and analytics is the combustion engine,” Mr. Sondergaard said. “Pursuing this strategically will create an unprecedented amount of information of enormous variety and complexity. This is leading to a change in data management strategies known as big data. Organisations need what we call a Pattern-Based Strategy, an architecture that seeks signals, models them for their impact, and then adapt to the business process of the organisation.

“The combined impact of these forces will make architectures of the last 20 years obsolete,” Mr. Sondergaard said. “Together, they force the issue – they drive us to create the post-modern business, drive simplicity and force creative destruction.”