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United States Information Technology Report Q3 2010
Business Monitor International, July 2010, Pages: 68
United States Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the United States' information technology industry.
US spending on IT products and services is forecast to reach US$629.3bn by 2014. In BMI’s core forecast scenario, US spending on IT goods and services will reach US$511.4bn in 2010 and then advance at a compound annual growth rate (CAGR) of 6.5% over our five-year forecast period. BMI has upwardly revised its forecast after the first quarter of 2010 brought strong growth in US PC shipments and signs of improved confidence in some IT-spending verticals.
A major IT services demand driver will be organisations looking for help to utilise efficiencies from cloud computing models such as software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS).
Other key market drivers are expected to include:
- Growing fixed and mobile broadband penetration
- Product innovation such as tablet notebooks, e-readers and feature-rich netbooks
- Technology innovation such as GPS and services
- Business model innovations such as virtualisation
- Economic recovery
Businesses are likely to remain cautious in 2010, but upgrade cycles should accelerate in the second half of the year, boosted by sales of Windows 7. The recession may have had a lasting impact on the IT market by creating the conditions for the popularity of low-cost netbooks and notebooks and encouraging consideration of new IT delivery models such as SaaS. In the light of these and other changes, major vendors have also adjusted their competitive strategies.
In August 2009 the federal government reported on its 2009 calendar year IT spending. In full-year 2009, total IT spending including all federal IT investment was measured at US$74.2bn, up 1.99% on the previous year’s total of US$72.8bn. In 2010, budgeted federal IT spending is set to rise to US$78.4bn.
The Federal Government’s Stimulus Bill, which required the use of electronic healthcare records (EHS) by doctors by 2015 is expected to be a major driver of investment in this area.
The US PC competitive landscape is dominated by two big domestic vendors, Dell and HP, which together have at least 50% of the US market. In April 2010 Apple finally launched its long-awaited iPad and achieved worldwide sales of around 2mn units within the first two months. Rival vendors such as HP and Dell have all announced or shown their own tablet products, while smartphone makers Research In Motion (RIM) and Samsung are also expected to compete in this segment.
One current driver of acquisitions in the IT services space is vendors positioning themselves to compete for the cloud computing services market. In May 2010, IBM moved to improve its position in this emerging area by purchasing California-based company Cast Iron Systems for an undisclosed sum. Meanwhile, the government remains a key vendor target. In May 2010, HP achieved one of its most recent local market successes with the win of a US$41.6mn contract from the US Department of Homeland Security. In September 2009, HP’s EDS unit won a US$30mn contract from the US Department of the Treasury’s Office of the Comptroller of the Currency (OCC) to provide and maintain computing resources and mobility services.
The US addressable market for PCs and accessories is estimated by BMI at US$115.5bn in 2010, with mid single-digit growth compared with 2009.
US PC sales grew strongly in Q110 and BMI estimated that the market was on course for full-year total PC sales of 77mn. In the first quarter of the year, sales were boosted by a revival of the business PC market, which is expected to gather pace in the second half of the year.
Notebooks are the fastest growing PC market segment and were on course to account for more than 60% of unit sales in 2009, while netbooks were forecast to account for around 15% of notebook sales. However, netbooks and notebooks face competition from other form factors such as smartphones from Palm, RIM, Apple and other vendors, and tablet notebooks, spearheaded by Apple’s iPad.
The US software market is estimated at US$148.3bn in 2010, with single-digit growth from 2009. Software CAGR for 2010-2014 is projected at around 6.2%, as the addressable market grows to around US$188.8bn. 2010 should see a boost from systems upgrades deferred from 2009 when the economic crisis had an impact across sectors. A combination of enterprise objectives such as cost reduction and greater efficiency should combine to drive more adoption of cloud services in 2010. Drivers of demand for enterprise software include increasing operational efficiency, coordinating global supply chains and modernising logistics and warehouse functions. More investment can be expected to be in utility software and serviced-oriented architectures rather than traditionally packaged PC software.
The US IT services market is estimated at US$227.3bn in 2010, with a sharp deceleration in spending expected compared with 2006-2008.
IT services spending is expected to record growth of 6.5% in 2010, after a sharp deceleration in 2009. Spending on IT services is quite closely correlated with GDP growth: bad news in a recession. One opportunity will be organisations looking for help with to utilise efficiencies from cloud computing such as SaaS and IaaS, as organisations in those fields look to save money on IT investments. Federal and local governments are one vertical where strong interest in cloud services is being expressed.
US IT Sector SWOT
United States Telecoms Market SWOT
US Political SWOT
US Economic SWOT
US Business Environment SWOT
IT Business Environment Ratings
Americas IT Business Environment Ratings
Table: Regional IT Business Environment Ratings
Latin America Regional IT Markets Overview
United States Market Overview
Industry Forecast Scenario
Table: US – IT Sector (US$mn Unless Otherwise Stated)
Table: Telecoms Sector – Internet – Historical Data And Forecasts
Table: United States – Economic Activity
Country Snapshot: US Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012 (US$)
How We Generate Our Industry Forecasts
IT Ratings – Methodology
Table: IT Business Environment Indicators
Table: Weighting Of Components
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