Emerging software tools help boost IT spending
Hardware spending lagging; IT hiring outlook mixed
Overall U.S. tech spending is forecast to grow by 7.1% this year and then by 7.4% in 2013, according to a research firm. The strongest growth area will be software management tools, and much of that growth will come from cloud-based products.
Janco Associates, a research firm that tracks IT employment, looks a narrower segment of IT jobs, and reported a net increase of 4,900 seasonally adjusted jobs IT jobs in March. CIOs they interviewed are doing limited hiring in the short term. The IT job market growth is either strong or weak, depending on what government data is used. Differences in IT job estimates are based on the decisions analysts make on what labor categories to include or not include in the estimate.
Another firm which tracks government data monthly says that 15,000 IT jobs were added in March out of the 120,000 new jobs reported by the government. They estimate the IT workforce now stands at 4.14 million.
IT Job Market Employment Trends
Overall financial management, human resources management, purchasing, CRM and business intelligence software will collectively grow by 11.4% through 2011, and 12% next year. Some hot new software categories are emerging from these broad software management areas. These include case management tools, automated spend analysis, services procurement, supplier risk and performance management, services procurement, as well as talent and recruitment management software tools. Software in these categories will grow by 15% to 20% both this year and next, with most purchases for software as a service products, the researcher projected.
The problems that technology is expected to solve are expanding. The emerging tools are used to manage areas that, in the past, lacked strong technical solutions. Case management software is used to manage a social service case or an insurance case. The tools are designed to bring together all relevant information a user needs to manage a case. They also analytical capabilities and the ability to work with other people. The technology that's available has a better fit against the unsolved business problems.
Supplier risk management tools allow a purchasing department, or line of business, to have in one place all the information, such as orders and history of business, about any of its suppliers. The risk management systems draw on third parties to check the financial condition of a supplier, and can even provide data on non-financial risk factors, such as environmental or social responsibility ratings.
Computer equipment spending growth this year will be 4.5%, less than half of what it was last year. Strong hardware spending over the last two years has given most firms the capacity they need. Hardware spending will rebound in 2013, rising to 8.4%, according to the research.
Overall IT spending next year will be $1,266 billion on all goods, services and staff. The largest categories are IT salaries accounting for $241 billion, and software at $232 billion. Computer equipment spending will be $92 billion.
What is not growing fast is IT hiring. The research estimates that IT staffs grew by only 0.3% last year, although salary and benefit increases brought up spending on staff to more than 4%. Hiring should grow by 2% this year and then to 4% in 2013. Competition for workers will cause compensation to rise, which will increase staff spending to 7.2% next year.