IT spending is rising, despite everything

Gartner calls the rate of spending lackluster, which may explain the lackluster rate of IT hiring

Hiring is flat and Europe's economy continues teetering, but IT spending is beating forecasts, says Gartner.

Worldwide IT spending is expected to reach $3.6 trillion this year, a 3% increase over last year, reports Gartner.

The report, released Monday, represents a revision from Gartner's previous forecast of a 2.5% increase in IT spending for the year.

Despite the new forecast, Gartner still calls IT spending "lackluster," and compared to some pre-recession years, it is. In 2007, for instance, worldwide IT spending increased by about 8%.

A bright spot for tech firms is the growing demand for public cloud services.

That category is expected to grow by 19% to $109 billion this year and will nearly double by 2016 to $207 billion, Gartner predicts.

"While the challenges facing global economic growth persist -- the eurozone crisis, a weaker U.S. recovery, a slowdown in China -- the outlook has at least stabilized," said Richard Gordon, research vice president at Gartner, in a statement.

Spending on computing hardware will reach $420 billion in 2012, up 3.4% from last year.

Spending on enterprise software is predicted to reach $281 billion this year, a 4.3% increase from 2011.

Worldwide IT services spending is forecast to hit $864 billion this year, 2.3% more than 2011, said Gartner.

The increased spending isn't helping overall IT hiring much, analysts say.

Janco Associates, a consulting firm that tracks IT labor data, says IT professionals saw a lowly net gain of 3,400 jobs last month while salaries remained flat.

Overall, the U.S., last month added 80,000 jobs, a relatively weak number.

A survey by Janco of 107 CIOs in May found that most are not as optimistic about hiring as they were earlier in the year.

Most of the CIOs said they are continuing to keep staffing level and don't expect any increases in permanent staffing in the next several months, said Victor Janulaitis, the CEO of Janco.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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