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IDC FUTURESCAN is a collection of metrics of IT industry leading indicators and customer surveys. Values
are based on expectations of future growth, with a value of 1000 equating to zero growth and each 10 points representing roughly 1% of expected growth.
These are external indicators only and don't represent IDC's forecast for the market, which is based on many more inputs and which relies on strict methodologies
and market definitions.
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This Month's Results
Although the buyer intent poll is slightly weaker this month, it's still above water and confirms the sense of a return to stability which we've
observed in recent months. US economic data has been relatively positive since November, despite lingering risks and the possibility of a knock-on
effect from recession in Europe. Whereas several months ago many US firms were predicting that IT spending was more likely to go down than up in 2012,
we've now arrived at a fairly broad consensus that this is unlikely. On average, IT buyers in the last three monthly polls have predicted that their
own organization's spending will go up by around 2%. That doesn't sound much, and it may still be a little pessimistic, but it's a good representation
of current business sentiment. In other words, the sense that things are gradually stabilizing and getting better, but that it's still too early to
breathe easily.
Taken together, the buyer intent poll and market indicators are pointing towards enterprise IT spending growth of somewhere between 2 and 3% this
year. Excluding smartphones and consumer spending, that's probably about right. Software spending will be stronger, but PC sales are weak and we've
worked of much of the post-crisis demand for 'catch-up' capital spending on hardware upgrades which was the main driver in 2010 and 2011. It could
turn out better, if the recent economic momentum is sustained. It could also turn out worse, if the global economy feels a backdraft from Europe.
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History
The downwards spiral which took hold in mid-2011 has been arrested (at least for now), with improving economic data giving a returning sense of
stability. GDP forecasts have stopped coming down (and in some cases, have even edged up); stock markets are recovering their losses; and corporate
profits, while lower than last year, are still expected to increase in 2012. The IT buyer poll has followed a similar path, foreshadowing this recovery
and then tracking it fairly closely since November. We're above water, at least for now, and that's more than we could have taken for granted just
three months ago. In general, most organizations are expecting to spend more on IT in 2012 than they did in 2011.
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Buyer Intent History:
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Line of Business managers are just slightly less optimistic than last month, but still much more positive than a few months ago.
CIO confidence, meanwhile, seems to have settled into a consistent range since October, with most IT department leaders predicting
that tech spending will go up by 2-3% this year. CIO polls at this time of year are usually fairly accurate predictors of IT spending
(notwithstanding the wild cards and economic volatility which can derail the best-laid plans). Last year, CIO confidence peaked in
February, as the year started off more brightly than many had expected and with many organizations showing a willingness to invest
in new technology on the back of soaring profits and (at that time) the perception that the worst of the economic downturn was firmly
behind us. We hit a sticky patch in mid-2011, though, and there are too many risks surrounding the global economy to be sure that
something similar won't happen this year.
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Market Indicators History
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The gradual improvement in macroeconomic indicators continued throughout December, leading us into a more positive start to 2012
than many had feared just a few months ago. Of course, everyone Is still worried about Europe and unemployment and the lingering sense
that the financial crisis isn't entirely behind us. But for now at least, the chances of a recession in the US this year are regarded
as slim by most economists. Instead, moderate growth is now expected, and this should translate into moderate to positive expansion
for the IT industry, continuing to just about outpace the overall economy. Within that overall moderate pace of growth will be plenty
of hot spots – enterprise software, cloud services, mobile devices. All signs are pointing in the direction of a year which won't
be the best or the worst of times for the IT market, and one which will provide lots of opportunity for both success and failure.
We wish you all the best for a prosperous and rewarding 2012.
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The Buyer Intent metric is based on surveys of 400-500 U.S. CIOs and line-of-business executives on their expectations
for IT spending growth during the next 12 months. Results are carefully weighted to be representative of the U.S. market. These surveys
are conducted monthly by the Quantitative Research Group (QRG) within IDC's Global Research Organization.
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The Market Indicator metric combines inputs from economic and IT industry supply-side indicators including:
- The stock market (S&P 500 over last 6 months)
- Current interest rates
- The current GDP forecast for the next 12 months
- The current US corporate profit forecast (next 12 months)
- The IDC IT Revenue Forecaster (% revenue growth expected next 2 quarters)
IDC combines and weights the inputs using information developed in its Leading IT Indicators program on the relationship of macroeconomic
trends to IT spending.
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IDC FUTURESCAN is a collection of metrics of IT industry leading indicators and customer surveys. Values are based on expectations of future growth,
with a value of 1000 equating to zero growth and each 10 points representing roughly 1% of expected growth.
These are external indicators only and don't represent IDC's forecast for the market, which is based on many more inputs and which relies on strict
methodologies and market definitions.
For more information about any of IDC's Black Books or other GRO products, please contact Amie White at awhite@idc.com
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