Survey: IT confidence surging, fueled by healthcare

By Mike Miliard
10:51 AM

The IT Industry Business Confidence Index released Thursday by CompTIA, the information technology trade association, points to renewed optimism and a strengthening economy. Healthcare advancements are key to the uptick.

The index, an average of sentiment about the economy, IT industry and individual companies, jumped seven points in December. At 60 on a 100-point scale, the index is now at its highest point since its inception, say CompTIA execs.

Data from the global survey of more than 1,100 IT companies suggests momentum will continue. IT company executives forecast an additional five-point increase in confidence over the next six months to 65, moving the rating into a solidly positive range.

“After several quarters of lackluster performance, an improving CompTIA confidence index should be welcome news to companies eager for economic stability,” said Tim Herbert, vice president of research for CompTIA.

With improving balance sheets and less market uncertainty, business investments will likely pick up, the survey indicated. For instance, it found that 45 percent of U.S. IT firms plan increases in expenditures on new products and business lines, while 43 percent plan technology-related investments – a 10-point increase over the third-quarter reading.

On the hiring front, one in three U.S. IT companies indicated they plan to increase staffing levels over the next six months – a positive indicator, but one still tempered by significant challenges.

“While the economic landscape is dramatically improved over a year ago, the employment situation is still cause for concern,” said Herbert.

Pent-up demand for IT products and services, along with robust sales in emerging markets and industries such as healthcare will drive growth in 2011, the survey found,

This could be somewhat offset, however, by price-sensitive customers seeking low-cost options, resulting in high unit volume growth, but modest revenue growth.

Mirroring improved business sentiment, global IT industry sales will also see a lift. CompTIA projects global IT industry spending growth of 4 percent in 2011, with upside growth potential of 6 percent. IT companies expect slightly higher growth in the areas of IT services and software, as well as in the enterprise market. Reflecting their fast-growing economies, respondents in Brazil, India and China are especially bullish with their forecasts, predicting upside IT industry revenue growth of 7.5 percent.

CompTIA spotlighted some key trends that will impact the IT industry in 2011:

  • "The Cloud is Calling." Cloud computing will continue to eclipse all other major tech trends this year and will demand the attention of users, vendors and the channel.
  • "Data is Exploding." Information proliferation poses a challenge to users, but also a great opportunity for technology service providers and users that can cull actionable business insights from their data.
  • "Computing Masses are Untethered." Mobile and wireless scenarios are increasingly crucial to doing business.
  • "Connections: The Ties That Bind." The rapid adoption of smartphones, mobile devices and social networking drive the trend of "anytime and anywhere work and play" and the rising currency of data.
  • "Falling Walls and the March Towards Unification." Businesses will build on VoIP and embrace presence, virtual telephony, multi-person video chat, mobile video conference  and related applications.
  • "Automation: Remaking How We Work." Organizations want to reduce the burden of labor-intensive processes, improve accuracy/consistency and generate better use of data.

The CompTIA IT Industry Business Confidence Index and 2011 Outlook study was fielded during December 2010 to 1,118 IT companies in the United States and around the world. Other countries covered in the study include Australia, Brazil, Canada, China, Germany, India, Ireland, Italy, South Africa, and the United Kingdom.