By Alan Skontra
If you want to know what's happening with the information technology economy, just study the DATA Inc. 2012 IT industry survey. The Montvale-based company, which has provided IT-related services worldwide since 1983, announced the survey's results in a public webinar on December 13, 2012.
DATA Inc. began conducting the survey in 2009 to understand what IT professionals — from programmers to executives — think of the industry's spending, employment and direction. Close to 200 people responded during the survey's October-to-mid-November 2012 window, after DATA Inc. contacted them through emails and social media and by other means. Up to 73.5 percent of the respondents are from North America, 20.4 percent are from Asia and 6.1 percent are from Europe.
DATA Inc.'s head of marketing, George Nikanorov, moderated the webinar's expert panel, which featured president and CEO Arun Verma, vice president of operations Conrad Leao and senior account executive Susan Leicht. Together they discussed the results and opined about the IT economy’s current state and future.
The survey led all three experts to reach a cautiously optimistic conclusion, though Verma was more confident than Leao or Leicht, who was the most cautious. “I am personally very optimistic about the future,” Verma said. “There is a general trend of growth coming out of the recession.” He said he finds the world's economic organizations, including the Federal Reserve Bank, the European Central Bank and the International Monetary Fund, to have competent leaders. “I believe in the success they are forecasting,” he said.
Nearly 70 percent of the survey's respondents said their companies had increased IT spending in 2012, a slight decrease from 2010, but more than 77 percent predicted increased spending in 2013. The questionnaire found that some industries have decreased their IT spending. For example, 66 percent of the respondents in pharma reported a spending decrease this year. Verma said he expected certain sectors to lag behind, but otherwise he is not concerned. “When growth is occurring, we should expect divergent results. Sectors grow unevenly,” he explained.
More than 41.1 percent of the reported IT spending went for projects that cost less than $1 million, while 25.7 percent went into projects of between $1 million and $25 million, 20.5 percent went to projects of up to $100 million and 12.8 percent went to projects exceeding that amount. Leitch said companies have been dividing projects into more manageable pieces. “There's a tendency to break larger projects into smaller projects for budgets. The mantra seems to be that leaner is better,” she said.
Among the respondents, 58 percent reported spending on IT infrastructure — the largest percentage of any area — followed by 57 percent on application support, and both staffing and application development at 44 percent. “The corporations we're working with are grappling with the need to upgrade their infrastructure,” Leao said.
Surprisingly, only 34 percent of the respondents said they had invested in mobile application development, which has a reputation as a booming new field. In fact, almost half deemed mobile apps a low spending priority, though 44 percent said they expected to increase spending on them in 2013. “We're convinced mobile applications are going to generate new opportunities,” said Leao.
The respondents indicated what they consider to be a challenge for implementing IT solutions. More than 46.2 percent said cost was an obstacle, followed by 32.1 percent who named support and maintenance, 31.1 percent who cited adaptation, 23.6 percent who cited a lack of resources, 22.6 percent who mentioned cost overruns and 18.9 percent who said they found a lack of available experts to be a challenge.
Though more respondents considered cost a greater challenge than a lack of experts or resources, more than 84 percent said that when hiring or awarding contracts they ranked IT professionals' experience as more important than their employment cost. More than 56.1 percent and 36.4 percent, respectively, said they were very satisfied or satisfied with their IT vendors, while 7.6 percent stated they were not satisfied. “We do see this a lot,” Leicht said. “Clients tend to value long-term relationships with their vendors.”
More than 81.1 percent of the respondents said they were currently employed, leaving the rest to say they were not. Nearly 40 percent of that figure — 18.9 percent — said they had been unemployed for less than three months, while 22 percent said they had held that status for between 12 and 24 months.
While the survey revealed an unemployment rate that is more than twice as high as the overall U.S. rate, the panelists warned against misreading the numbers.
“Reports are showing that large corporations are showing health — they're spending — and as soon as that happens, the concept of trickle down kicks in,” Verma said, suggesting that those companies will then hire more service providers like IT professionals. “The progression of cycles will continue, and the growth of new IT jobs will continue to drive the economy.”
After discussing all those numbers, the panelists made their predictions for the future. Leicht said she was cautious but optimistic; Leao said he agreed. “There's cause for optimism. The road might be rocky, but we do see light at the end of the tunnel,” Leao added.
Verma was the most bullish. “In the past, spending and technology have always generated good results,” he said. “Our industry stands to benefit handsomely.”