Disk Drive Price Increases, Spending Decreases

First predicted to grow 4.6% this year, Gartner has adjusted the 2012 IT Spending Forecast by reducing expected growth forecasts to 3.7%. A reflection of the current economic conditions in 2012, Gartner vice president Richard Gordon stated that the flooding in Thailand, the economic crisis in Europe, and slow global economic growth influenced the choice to reduce the IT spending forecast.

Gartner says that enterprise software, hardware, and IT services will all see reduced growth in 2012 due to economic conditions. Hardware spending is expected to grow 5.1% this year, replacing the previous prediction of 7.6% growth.

On the global level, IT spending is expected to reach $3.8 trillion this year, although enterprise software and hardware are expected to see reduced rates of growth.

Thailand’s Impact on Forecast Changes

One factor that may impact the hardware spending is the flooding in Thailand, which damaged hard drive factories and shut down production. Predicted hard drive shortages and increased prices could be detrimental to 2012 IT spending, as Garter’s Gordon expects that the hard drive shortages will impact supply for the next six to nine months.

NetApp and EMC price increases are expected to continue through the first quarter of 2012. Both EMC and NetApp announced the price increases on their enterprise hard drive products before the end of 2011, reflecting the cost of the damaging flood waters that destroyed production facilities and closed shipping avenues. Prices for EMC disk drives are expected to increase about 15% across all EMC product lines, while prices for NetApp disk drives are expected to follow suit. NetApp has announced that price increases for NetApp disk drives will range between 5% and 15%*.

Enterprise hard drives from NetApp and EMC are currently produced by companies like Seagate and Western Digital, who are also undergoing changes not related to the Thailand floods. Seagate and Western Digital have both constructed acquisition plans to increase and diversify their product lines.

Read more about how Seagate and Western Digital acquisitions affect enterprise disk storage.

Slow Economic Growth Downgrades Spending Forecasts

Gordon also noted that the eurozone crisis in Europe and slow economic growth may also impact IT spending on the global level. The research firm expects IT spending in Western Europe to decrease as much as 0.7% due to the economic turmoil currently associated with the area.

*More information about NetApp disk drive price increases can be found here.


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