The Year Ahead in Technology: Growth Outlook and Trends to Watch

“The only function of economic forecasting is to make astrology look respectable,” cracked economist John Kenneth Galbraith. Although said in jest (sort of), Galbraith accurately captures the sometimes questionable track record of prognostications. Yes, this applies to tech sector forecasting as well – I know, hard to believe!

Nonetheless, no business can avoid thinking about the future. Even if imperfect, economic and industry forecasting serves a useful purpose in framing possible outcomes and identifying factors to include in strategic planning.

Each year, CompTIA releases a consensus industry forecast, based on input from IT industry executives. This wisdom of the crowds approach balances the opinions of the overly optimistic with the overly pessimistic, yielding a best fit forecast.

For 2013, CompTIA projects a growth rate of 3 percent for the global IT industry, with upside potential of 5.2 percent. The forecast for the U.S. market is slightly lower – 2.9 percent with upside potential of 4.9 percent. For the U.S. market, this translates to $27.6 billion to $46.6 billion in potential new revenue for the year.

Several opposing forces will be at play in 2013, affecting which side of the forecast the industry hits 12 months from now. CompTIA research consistently shows strong demand for a wide-range of IT products and services, as businesses increasingly view technology as a vital competitive advantage.

Reaching the upside of the forecast will require macroeconomic stability, steady business confidence and customers that are financially healthy. Recent indicators suggest there is a good chance of this happening.

While the upside looks obtainable, a few red flags must be acknowledged. IT industry executives voice concern about downward pressure on prices. Some categories may see large unit volume sales, but modest revenue growth due to falling prices (case in point: recent price cuts among prominent cloud service providers). The other challenge entails customers shifting from higher-priced products or services, to lower-priced options. For example, foregoing a refresh on a $1,250 laptop and instead buying employees a sub $500 tablet.

Any growth outlook must be considered against the backdrop of the creative destruction taking place in the IT industry. The interplay of macro trends, technology trends and channel trends will shape the information technology landscape in the short-term, while setting longer-term developments in motion. Notable disrupters, including cloud, mobility, social, big data and the Internet of Things will continue to disrupt, inevitably in some unanticipated ways.

Expect the year ahead to see further evolution and progression on many fronts, including in the following key ways:

Macro Trends to Watch:

• Progress Along Innovation Learning Curve Pays Dividends
• Expectations Reset: The Push for Faster, Larger, Easier and Safer
• Open and Transparent Further Displaces Closed and Hidden
• The Distributed Economy Deepens

Technology Trends to Watch:

• Technology Continues Its Transition from Supporting Tool to Strategic Driver
• Mobility Becomes a Way of Life…for Employees and Customers
• Companies Begin Taking Cloud Computing for Granted
• The Big Data Phenomenon Will Force Companies to Review Data Practices
• Communications and Collaboration Get a Boost from the Cloud

Channel Trends to Watch:

• Managed Services: Upping the Game
• Navigating the New Channel Ecosystem
• Specialization: Tackling Growth Markets
• Convergence Creates Strange Bedfellows

For more details on these and other trends, CompTIA members can access the IT Industry Outlook 2013 report by logging into CompTIA.org and visiting the research tab.

Let us know how the year ahead looks for your business. Happy forecasting!