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IT Spending Predicted To Increase 5.1 Percent in 2011

Worldwide spending in the IT field is estimated to grow by 5.1 percent compared to 2010 numbers, according to Gartner, a Stamford, Conn.-based technology research and advisory company.

This recent estimate, released on Thursday, is higher than its previous forecast of 3.5 percent. Gartner projects enterprises around the world will spend $3.6 trillion in IT-related costs -- up from $3.4 trillion last year.

While a more than 5 percent growth may look to indicate overall economic growth and stability, Gartner warns it does not.

In actuality, a 5.1 percent increase in IT spending could translate into a .4 percentage drop in spending when the U.S. dollar devaluation is factored in, according to Richard Gordon, research vice president at Gartner.

"Lest we get over-excited, it's worth noting that much of this rise is down to currency exchange rate fluctuations that are routinely factored into our forecast," wrote Gordon in a blog post. "In fact, of the 1.6 percentage point increase in U.S. dollar-denominated IT spending growth, 2.0 percentage points of the gain (i.e. more than all of it, if that makes sense) comes from U.S. dollar devaluation."

The reduction in IT spending can be linked to poor PC sales in 2010 and Gartner's own reduced estimates for enterprise spending on new PCs for this year. With the emergence of more smartphone and tablet-based devices, companies are looking towards alternatives to the stand-alone PCs.

Because of this growing trend, Gartner does project that telecom equipment spending will find some gain in 2011, with an increase of 9.1 percent in the market. Overall, third-quarter sales were higher than projected for smartphones and other mobile devices -- a trend the research company estimates will continue for this year.

Gartner is expected to give more details and analysis for IT spending in 2011 during a webinar on Jan. 11.

About the Author

Chris Paoli is the site producer for Redmondmag.com and MCPmag.com.

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