While I am still relatively bullish on the 2012 tech market outlook for the US (see our April 2, 2012, "US Tech Market Outlook For 2012 To 2013" report), I have to say that the data we got on the US economy and on the US tech market was a bit softer than I expected. US real GDP growth came in at 2.2%, a bit lower than my expectation of 2.5%. On the positive side, consumer spending rose by 2.9% in real terms, and residential construction continued to improve. On the negative side, business investment in structures was weak, and government spending fell at both the federal and state and local levels. More to the point, business investment in computer equipment and communications equipment fell from Q4 2011 levels, though computer equipment investment still was almost 8% higher than levels a year ago. Software investment, though, was up strongly — by 8.2% at an annualized rate from Q4 2011 and by 8.4% from Q1 2011.
A recent conversation with IBM software executives sheds more light on the topic of software audits. Responding to a blog post we published a few months ago, IBM recognized some of the challenges inherent in an IBM software audit. They proclaimed that getting through an audit, addressing these challenges, and moving towards license optimization is cemented in Software Asset Management (SAM) best practices. IBM also told us that the causes of client exposures fall into one of three categories:
Customers' indifference to their responsibility in an IBM software agreement. Few companies fall under this category, as most decide to be held accountable for their compliance.
Loss of deployment control. Complicated licensing structures and poor SAM practices characterize this category. While IBM licenses inherently are complicated, clients add to the complexity when they deviate from the standard contract in an effort to add flexible terms. A common example of a poor SAM practice that contributes to IBM software exposure is the lack of communication between those that procure the licenses/negotiate entitlements and those that deploy licenses.
Over-deployment due to non-malicious gross error. While companies may not maliciously over-deploy IBM software in their environments, some innocently deploy them by accident. A common example includes the case of the "golden CD" where software from a CD is mistakenly replicated across the vast server landscape. Additionally, some companies misinterpret their entitlements. An example of this includes deploying licenses based on a misunderstanding of their terms and conditions.
The US economy continues to show improvement – for example, today’s news that new jobless claims were near a four-year low. As the economy outlook has improved, so, too, have prospects for the US tech market. In our updated Forrester forecast for US tech purchases, "US Tech Market Outlook For 2012 To 2013: Improving Economic Prospects Create Upside Potential," we now project growth of 7.5% in 2012 and 8.3% in 2013 for business and government purchases of information technology goods and services (without telecom services). Including telecom services, business and government spending on information and communications technology (ICT) will increase by 7.1% in 2012 and 7.4% in 2013.
The lead tech growth category will shift from computer equipment in 2011 to software in 2012 and 2013, with and IT consulting and systems integration services playing a strong supporting role. Following strong growth of 9.6% in 2011, computer equipment purchases will slow to 4.5% in 2012, as the lingering effects of Thailand's 2011 floods hurt parts supply in the first half and the prospect of Windows 8 dampens Wintel PC sales until the fall. Apple Macs and iPad tablets will post strong growth in the corporate market, though, and server and storage should grow in the mid-single digits.