The information technology industry is having a growth spurt — welcome news for a U.S. economy that’s otherwise barely creeping along. Spending on IT will climb by about 5% next year, following a 7% jump this year over last. Consumers shelling out for hot new gadgets play a part, but the biggest outlays are by firms upgrading equipment and services. Total U.S. expenditures on IT will come close to $625 billion this year, versus about $600 billion in 2011.
Cash in on Cloud Computing
The IT sector’s strong upswing after several lackluster years is also good news on the jobs front. Overall, the labor pool of skilled IT workers is tight. Dice.com, a leading IT job-listing site, currently has more than 80,000 postings from companies looking for workers. The industry jobless rate was just 4.7% in July. For the U.S. as a whole, it was 9.1%.
Among IT’s growth drivers: Business spending on powerful mainframe computers and the “cloud,” which lets firms store computerized data and tasks on the Web, freeing them from having to manage systems internally in whole or in part. Explosive tablet computer sales, social networking and other Internet services are also fanning the flames.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Mainframes. Used by businesses to crunch financial, sales and other data, these machines are undergoing a once-in-a-decade upgrade cycle — music to the ears of IBM, the leading manufacturer. IBM’s mainframe revenue will be up over 50% this year.
Cloud computing. Look for American businesses to invest about 20% of their annual IT budgets on cloud applications by 2020, up from just 2% now. The payoff for firms will be huge. It costs just 3¢ per month to store 1 gigabyte of information in the cloud versus 75¢ in-house. With businesses collecting data in ever larger amounts, storage services by third parties will see demand soar. Providers include Amazon, IBM, Rackspace, Apple, Microsoft, Hewlett-Packard, Dell and Oracle.
Spending on cloud computing and storage could top $1 trillion by 2014. Even Uncle Sam is getting in on the act. Government IT managers plan to shutter 800 data centers around the country in favor of cloud services from private firms. The most sensitive documents will be kept in-house, though.
The tablet phenomenon. Hard to believe these small, superthin computers burst onto the scene just over 15 months ago, because they’re already ubiquitous. The tablet turf is dominated by Apple’s iPad, of course, with a 61% market share. But keep an eye on Amazon and Barnes & Noble, which will offer tablet versions of their popular e-readers this fall. Odds are sales for both new products will take off.
Social networking. Figure on it becoming more splintered in coming years, with the emergence of many smaller sites geared to particular occupations or interests. One such example: Biznik, a networking site for entrepreneurs and small businesses.
The next big thing? A new Internet protocol, IPv6, to be rolled out by 2014. It will open doors to a slew of new devices — meters, home automation gizmos, sensors embedded in bracelets and many more — all able to send and receive data over the Internet. If you think a lot of apps are out there now, just wait a while.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
Ask the Editor: IRAs, 401(k)s and RMDsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on IRAs, 401(k)s and required minimum distributions
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
-
AI Appliances Aren’t Exciting Buyers…Yet
The Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
What to expect from the global economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
The AI Boom Will Lift IT Spending Next YearThe Kiplinger Letter 2026 will be one of strongest years for the IT industry since the PC boom and early days of the Web in the mid-1990s.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter Though AI is a transformative technology, it’s worth paying attention to the rising economic and financial risks. Here’s some guidance to navigate AI’s future.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
