IT Spending Up - But That Doesn't Mean More IT Jobs

New information from IDC this week reveals that despite global economic doldrums, IT spending will still grow by an average of 6% globally. But don't look for a corresponding increase in IT jobs, which are getting substituted by more automated software and services.

The growth projection comes at a time when new signs of life in IT are being seen in many large companies, fueled by the demand for more specialized talent as well as coping with an increase in bring-your-own-device (BYOD) policies.

That was some of the takeaway from IDC's 2012 edition of its Worldwide Black Book Query Tool, which is pegging overall growth at higher-than-expected levels.

More Spending, Not More Employment

"There has almost been a decoupling between IT spending and hiring, with a real divergence in the last two to three years," said Stephen Minton, VP at IDC. "Businesses are spending money to save money," Minton explained. But what they're spending on, more than hardware expenditures and staffing, are software and services. Software services have enabled IT departments to save money on personnel, and they are taking advantage of the savings.

"Instead of hiring new people, we're seeing a kind of labor substitution with the acquisition of these services," Minton elaborated. Such services range from the obvious - such as virtualization and storage management - to the not-so-obvious, including collaborative tools and social software. These last two categories, Minton emphasized, were seeing the fastest growth in software and services right now.

The news is not all bad in IT hiring; General Motors announced last week that it would be hiring an additional 500 IT staffers in Austin, Texas, part of an overall plan to put 10,000 more IT workers on its global payroll in the next three to five years.

Still, hiring across the board is still slow, as IT departments work to replace staff with more automated services.

Hardware Weak Now, But Look Out

The other big theme from this year's report is the expected uptick IDC sees for PC and hardware sales. In the fourth quarter, the analyst firm is looking for an big boost in PC sales due to consumer purchases of Windows 8. On the enterprise side, Minton expects that see a stronger-than-usual hardware upgrade cycle over the next two years.

The reason? IT managers and CIOs have been holding off buying new systems for a long time.

"The last three years were so bad for hardware," Minton explained. That repressed spending, Minton believes, is about to end as older PCs and servers will simply have to be replaced as they give up the ghost.

"Those companies committed to using Windows have been waiting for this for a long time," he added.

The question is, who will be responsible for buying the new hardware? Will it be in the hands of IT procurement, or will the rising trend of bring your own devices shift the purchase decisions to employees?

Employees Spend More on IT

In the last 18 months, Minton and his colleagues at IDC have seen a steady rise in Chief Information Offices who are giving up on stopping employees from bringing in their own hardware. Many are now considering subsidization programs that let the employee purchase a system of their own.

While this type of spending decentralizes IT expenditures and creates more heterogeneous corporate environments, Minton also believes it actually increases the rate of IT spending. "When business users have more choice, they are enthusiastically buying more powerful hardware," Minton said.

As evidence for this supposition, Minton had only to point to the rise of smartphones, which might never have exploded in growth without pressure from end users who wanted to use these devices in corporate settings.

With so much decentralization in software, services and hardware management, it's clear that IT departments have a lot of restructuring to do. How this translates into jobs is not terribly positive right now, but for overall IT spending, the future is far from bleak.

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