IT hardware and software companies expect to see most of their revenue come from the U.S. market this year, which is a reversal from the last two years when China and India led, according to KPMG's annual survey of the technology business climate.
KPMG, an audit, tax and advisory firm, found in its survey that the U.S. market will provide the highest percentage of revenue and employment growth over the next 12 months, besting China, Brazil and India in both areas.
But this KPMG survey of 102 C-level or senior executives at hardware and software companies also dampens expectations about hiring.
Last year, as the economy was coming out of the recession, 72% of the executives surveyed said that they anticipated an increase in their companies' headcounts. But in this year's survey, which was conducted in May and June, the executives were less optimistic about the hiring outlook, with less than half (49%) predicting a headcount increase this year.
Of the respondents, 71 are at companies with revenues of more than $1 billion and 31 are at firms in the $100 million to $1 billion revenue range.
Overall, 27% of those surveyed said headcount had reached or exceeded prerecession levels, and 42% said headcount would return to prerecession levels over the next 18 months. However, 21% said it would never return to those levels. "At least in the short-term, they've outsourced more activities," said Gary Matuszak, a KPMG partner and global chair and U.S. leader of the firm's technology, communications and entertainment practice.
In last year's survey, respondents said that they believed the U.S. recovery would take hold in 2012. But this new survey pushes that expectation out to 2013. "The executives, historically, have been overly optimistic about when the recovery might happen," Matuszak said.
The survey also ranked cloud computing as the top revenue driver. It was chosen by 65% of the respondents, up from 54% in last year.
For a look at the buyer side of the market, IT management research firm Computer Economics surveyed more than 200 IT executives in the first quarter of this year for its annual IT Spending and Staffing Benchmark study. In that study, whose results were just released, 60% of the respondents said that they planned to increase their operational budgets, and 22% said they had plans to decrease their budgets. The remaining 18% said that they plan to keep their IT budgets the same. But that's an improvement from last year, when 44% indicated that they had plans to decrease IT spending.
But median annual growth of IT operational budgets in 2011 was put at 2%. Prior to the recession, in 2008, the growth rate was pegged at 4%. "We're seeing subtle improvements across the board," said John Longwell, vice president of research at Computer Economics.
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 email address is email@example.com.