Global IT spending should grow by 6.3 per cent in 2006, driven by software spending, but that growth would be smaller than the 6.9 per cent in 2005, IDC said on Thursday.
Global IT spending totalled about $1 trillion in 2005, and should grow by about $100 billion in 2006, IDC said.
Hardware growth of 9 per cent drove spending in 2005, the "fastest rate of growth since Y2K," said Stephen Minton, vice president of the IDC worldwide IT markets research group. But a pent-up demand for hardware and infrastructure upgrades shouldn't continue at the same pace in 2006, he added.
However, software spending should grow by 7 per cent, with hardware and services spending growing at a 6 per cent clip, he said.
Global IT spending grew about 5 per cent in 2004, Minton said. He called 2006's forecast "pretty good."
"It's a little bit better than most industries," he said. "But we don't see IT going back to double-digit growth."
IT spending grew by 14 per cent in 1995, fueled by the growth of the web and Microsoft's Windows 95 operating system, Minton said. That double-digit growth continued through 2000, but spending declined in the dot-com bust year of 2001.
In the US, overall growth in 2006 will be 5.8 per cent, IDC predicted, a slight decline from a 6.4 per cent expansion in 2005. Strongest growth will be in network equipment, outsourcing services and system infrastructure software, including security tools.
Elsewhere, improving economic conditions are contributing to an enhanced outlook for IT spending in Western Europe, where overall IT growth will reach 6 per cent this year, IDC said. The Asia and Pacific region, excluding Japan, will see 9 per cent growth in 2006, led by double-digit spending gains in China with 14 per cent, and India with 21 per cent, IDC said.
IDC expects IT spending to grow by about 5 per cent a year through 2009, with lower growth rates due to increasing "maturity" in several IT sectors, including networking equipment, Minton said.