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Enterprise Software Leads IT Spending Growth: Gartner

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Posted July 3, 2013 By Pedro Hernandez     Feedback

The industry's appetite for business software, particularly CRM, is helping to push IT spending rates higher.

IT spending is predicted to reach $3.7 trillion worldwide in 2013, a 2 percent increase over last year's levels, according to research firm Gartner. Leading the charge is enterprise software, partly on the strength of the market for customer relationship management (CRM) products.

Gartner forecasts that IT buyers will spend $304 billion on enterprise software this year, a 6.4 percent bump over 2012. Last year, businesses spent $285 billion on software. Enterprise software will outpace other categories, such as devices (2.8 percent growth) and data center systems (2.1 percent growth) by a healthy margin.

A big driver is CRM, a class of software that is being brought into closer alignment with shifting consumer behaviors, says Gartner. "Growth expectations for customer relationship management (CRM) have been raised to reflect expanded coverage into e-commerce, social and mobile," said the firm in a statement.

In April, Gartner said that it the CRM software market jumped 12.5 percent in 2012, hitting $18 billion in sales compared to $16 billion in 2011. "Market growth in 2012 was three times the average for all enterprise software, highlighting how CRM is at the eye of the Nexus of Forces storm," noted Gartner vice president Joanne Correia. Nexus of Forces, in Gartner parlance, describes the convergence of social, mobility and cloud computing.

Top companies in the space include the market-leading cloud company Salesforce followed by business software titans SAP, Oracle, Microsoft and IBM.

Other types of software, including operating systems, aren't faring as well. "Expectations for digital content creation and operating systems have been reduced as software as a service (SaaS) and changing device demands impact traditional models and markets," added Gartner.

Overall, worldwide IT spending in 2013 will fall short of initial expectations. The cause: currency moves.

In a revised forecast, Gartner pulled back from its initial outlook of 4.1 percent growth in terms of U.S. dollars. "The 2.1 percentage point reduction mainly reflects the impact of recent fluctuations in U.S. dollar exchange rates; growth in constant currency is forecast at 3.5 percent for 2013, down only slightly from last quarter," informed the analyst group.

By 2014, IT spending is anticipated to rise 4.1 percent to reach $3.875 trillion. Enterprise software is expected to lead again in terms of growth (6.6 percent) followed by devices (6.5 percent) and IT services (4.6).

Pedro Hernandez is a contributing editor at Enterprise Apps Today and InternetNews.com. Follow him on Twitter @ecoINSITE.

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