Gartner Revises 2013 Government IT Spending Outlook to 0.1% Drop

Governments worldwide will spend $449.5 billion on information technology this year, a decline of 0.1 percent from 2012, according to a Gartner Inc. (IT) report that revises an earlier estimate of an increase.

The main priorities will be mobile technologies, IT modernization and cloud computing, the Stamford, Connecticut research company said today in a statement. The estimate includes hardware, software, IT services and telecommunications.

The revision from its earlier outlook for a 0.2 percent increase comes as “government agencies continue to struggle against weak economic development,” Gartner said. The estimate is based on a study from June through September last year in 13 countries, including China, Brazil, India, the U.S. and Germany.

“Cloud computing, in particular, continues to increase compared with prior years, driven by economic conditions and a shift from capital expenditure to operational expenditure, as well as potentially more important factors such as faster deployment and reduced risk,” Christine Arcaris, Gartner’s research director, said in the statement.

Earlier this month, International Business Machines Corp. (IBM), a longtime federal contractor, successfully protested a $600 million contract award for Amazon.com Inc. to provide cloud-computing services to the U.S. Central Intelligence Agency. IBM’s protest is ”potentially preventing a new competitor, like Amazon, in getting more government work,” said Amit Daryanani, an RBC Capital Markets analyst in San Francisco.

To contact the reporter on this story: Madeline McMahon in New York at mmcmahon26@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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