Record IT spending increase rains dollars on hardware, clouds

End-of-year fears on PC spending blown out by new results

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Corporate spending on IT, which analysts have been hemming and hawing on for months, looks like it's accelerating much faster than most thought, if IDC's latest report on it is any indication.

And it will continue into this year, led by increased sales of hardware, but accelerated by astonishing growth in cloud computing.

Actual spending numbers didn't blow out the doors of a market that has been closed up pretty tight for the last two or three years, but it open things up for a good airing.

Globally, IT spending grew 8 percent during 2010 to more than $1.5 trillion, the fastest rate of growth since 2007, IDC reports.

Hardware spending, especially pent-up demand for replacements that many companies delayed to save money during 2009 and early 2010, drove much of the growth.

Much of the rest came from the upgrade of core IT systems and new IT projects that had been delayed, both of which are good signs that large corporations are more confident in their ability to get a good return on tech spending that make them more efficient or able to create new lines of business.

"Many organizations took the opportunity to make up for lost time by upgrading mission critical systems and infrastructure over the course of the year," according to lead author Stephen Minton." While downside macroeconomic risks are still present, we entered 2011 on the back of a resounding rebound for the technology industry."

Growth in hardware spending rose 16 percent, but was balanced by software and services spending that grew 4 percent and 2 percent.

Overall IT spending should grow 7 percent during 2011, led by hardware increases of 10 percent, with software (5 percent) and services (4 percent) following far behind.

Growth in the U.S. was slower – 6 percent this year and a projected 5 percent next year.

Late last year Gartner and IDC both reduced their projections of spending on PCs and tightened projections on other categories of IT.

The standout in software and services will be growth in cloud computing, which continues to grow at rates far higher than any others in IT, according to an IDC report on public cloud services.

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