Gartner: Global software budgets will grow next year

A new report by Gartner showing that software spending will increase worldwide next year indicates there may be truth to the general belief that the technology market has hit bottom.

According to results of a Gartner survey of about 1,000 IT professionals worldwide conducted during April and May, 28 percent of companies in North America expected to increase their software budgets in 2010, while 25 percent of companies in Europe, Middle East and Africa (EMEA) and 30 percent in the Asia/Pacific region expected the same.

“We’re at a turning point,” said Joanne Correia, managing vice president at Gartner and the lead analyst on the survey. She said it was conducted during those months because that was about the six-month point after the global economy went into crisis and companies had some time to plan their way through it.

“Everybody has been through six months of ‘What am I going to do?'” she said. “We wanted to get a good idea of what their tone was going to be.”

Many second-quarter financial results for major sellers of software such as Microsoft and IBM showed a decline in year-over-year revenue in that segment. However, companies in general reported that though they were not out of the woods financially yet, there would be growth over the next year.

Correia said Gartner’s report supports an overall cautiously optimistic tone. While it appears that companies’ software budgets have bottomed out and are on the rise, she warned people not to expect anything dramatic yet. “We’re crawling out of the hole,” Correia said.

Despite this bit of good news, software spending in general is still expected to be on the decline in North America, though other geographies are expecting a slight bump, according to the report.

Software spending in North America is expected to decline 2.06 per cent in 2010, with EMEA showing slight positive growth at 0.45 per cent, Gartner reported.

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Jim Love, Chief Content Officer, IT World Canada

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