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Emerging Markets Increase Investments in Hardware

Jeffrey Burt is a senior editor for eWEEK and contributor to TechWeekEurope

Larger enterprises in emerging markets like Brazil, Russia, China and India were more likely to increase investments in IT hardware than their counterparts in mature markets

They also are increasing investments in such as areas as virtualisation, green IT and—to a lesser extent—cloud computing.

Emerging markets hold a lot of promise for IT hardware vendors, according to research firm Gartner.

In a report issued on 22 July, Gartner analysts said that in 2009, IT hardware spending growth rates in emerging markets will be larger than those in more mature markets.

In addition, spending in emerging markets on virtualisation and cloud computing technologies also will increase, they said.

The trends were found in the results of a survey of 951 IT professionals in large enterprises worldwide. The results should impact where IT hardware vendors and their channel partners put their money and efforts, according to Gartner analyst Luis Anavitarte.

“These survey results are very important for technology and service providers, not only because they validate where the IT growth trend is occurring in emerging markets, but also because they can guide planning and resource allocation processes,” Anavitarte said in a statement. “This should also have an impact on hardware vendors’ channel strategies addressing large enterprises, particularly in Brazil, Russia, India and China.”

Overall, the survey found that 66 percent of those responding said there either would be an increase in IT budgets this year or no change from last year.

In each of four categories—storage, servers, PCs and printing devices—a greater percentage of respondents in emerging markets said they planning to increase spending on IT hardware or keep the same, as compared with their counterparts in mature markets.

For example, 33 percent of those in emerging markets said they planned to increase spending on storage hardware, compared with 27 percent in mature markets. In servers, 30 percent in emerging said they planned to spend more on servers, compared with 27 percent in mature markets.

For PCs, the split was 32 percent to 19 percent, while it was 28 percent to 16 percent for printing devices.

In addition, those saying their spending was going to remain the same as in 2008 was higher in each category for emerging market enterprises than those in mature markets.

In addition, 35 percent of respondents in emerging markets said they planned to increase investments in virtualisation, 32 percent said they would do the same in green IT, and 7 percent said they’d invest more in cloud computing.

There are several reasons for this trend in emerging markets, including that many of these enterprises have IT plans in place that includes renewing hardware, as well as that they more financial resources than their SMB brethren and rely less on borrowing money to cover their IT operations.

In addition, according to Gartner, these larger enterprises more often play on an international stage and need to have top IT resources to compete on an international level.

Regarding virtualisation, Gartner analysts are seeing more enterprises in emerging markets beginning to adopt the technology, and that interest in green IT will continue to grow in accordance with governmental regulations.

Cloud computing continues to be a new computing model in the emerging markets. According to the survey, half of the respondents in the emerging market organisations had not heard of cloud computing or had heard of it but didn’t know what it meant. Not all markets were like that, however. In Brazil, 28 percent of channels are delivering software as a service.