Software Management, Cloud Tools Boost IT Spending

Tech spending is increasing and much of the money is headed toward cloud-based software products, according to Forrester Research.

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Tech spending in the U.S. is expected to grow 7.1 percent this year, up from 6.6 percent last year. Forrester expects spending to increase to 7.4 percent next year. The strongest growth area will be for software management tools related to cloud-based products. Software for financial management, HR management, ePurchasing, CRM and Business Intelligence software will collectively grow by 11.4 percent this year and 12 percent in 2012.

The broad software management areas are creating new categories including case management tools, automated spending analysis, services procurement, supplier risk and performance management, and services procurement, as well as talent and recruitment management tools. Software in these categories is expected to grow by 15 to 20 percent this year and next.

“The problems that technology is being expected to solve are expanding,” Andrew Bartels, an analyst at Forrester, told Computerworld. Today, he said, these emerging tools are used to manage business problems that previously lacked strong technical solutions. For instance, case management software brings together all the relevant information needed to manage an insurance case.

The biggest categories for overall IT spending will be IT salaries ($241 billion), software ($232 billion) and computer equipment spending ($92 billion).

However, IT hiring isn’t growing nearly as fast as IT spending. Technology staffs grew by only 0.3 percent last year, Forrester says. IT hiring is expected to grow by 2 percent this year and four percent in 2013. Competition for workers will cause compensation to rise, which will increase staff spending to 7.2 percent next year.

TechServe Alliance says that IT employment reached an all-time high in March. The number of jobs grew by 15,000 that month out of the overall 120,000 new jobs reported by the government. “On a year-over-year basis, IT employment grew at almost twice the rate of the overall job market,” said Mark Roberts, CEO of TechServe Alliance.