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BMI View: USA IT spending is forecast to reach US$559bn in 2012, up 5.5% year-on-year. This leaves
our 2012-2016 forecast largely unchanged this quarter, despite a further contraction in PC sales in
H112. Meanwhile, public IT procurements remained constrained due to the budget constraints faced by
many government entities. Overall moderate growth in budgets is expected, but much depends on the
economic situation. Despite a drive to cut expenses across government, many public sector organisations
have appeared willing to continue spending on IT; however, the government hopes to make savings in its
US$80bn IT budget. US businesses remain cautious, but there is pent-up demand from projects delayed
as a result of the economic situation and cloud computing is expected to be increasingly important.
Headline Expenditure Projections
Computer Hardware Sales: US$141.5bn in 2011 to US$146.8bn in 2012, +3.6% in US dollar terms.
Forecast in US dollar terms unchanged from Q312, but Ultrabook failed to provide the hoped-for support
to PC sales in H112.
Software Sales: US$153.0bn in 2011 to US$163.0bn in 2012, +6.4% in US dollar terms. Forecast in US
dollar terms unchanged from Q312, but more investment is expected in utility software and servicesorientated
architectures rather than traditionally packaged PC software.
IT Services Sales: US$234.9bn in 2011 to US$249.3bn in 2012, +6.0% in US dollar terms. Forecast in
US dollar terms unchanged from Q312, with an increasing share of IT budgets being earmarked for newer
solutions such as virtualisation and cloud computing.
Risk/Reward Ratings: The USA scores 76.3 out of 100.0 for Q412. The USA ranks first in our
latest Americas risk/reward ratings (RRRs) table, ahead of Canada, as well as Latin American giants
Brazil and Mexico. The country ranking was secured by its global highest industry rewards score of 82.5,
while its rating was also boosted a relatively high country rewards score of 90.0.
Key Trends & Developments
The US federal government's ambitious Cloud First cloud migration strategy has tasked
government agencies with migrating 80 services to the cloud within 18 months. Key government
agencies including NASA and the General Services Administration are already using the cloud
to collaborate and deliver applications. The government hopes to eventually realise savings of up
to US$12bn per year from the move and will seek further savings by closing 472 federal data
centres by the end of 2012.
IT vendors will be concerned when it comes to the effect of the ongoing US federal deficit issue
and the failure of politicians to agree a deficit reduction programme. If automatic federal
spending cuts kick in during the next fiscal year, this could hit IT projects. The November 2012
elections will also create uncertainty about the trajectory of future government IT spending.
US PC sales are forecast to report single-digit growth in 2012, after a further annualised
contraction in Q212. In H112, sales of ultrabooks fell far short of Intel's prediction that
ultrabooks would comprise 40% of US notebook sales by the end of 2012. While exact sales
figures are hard to derive, these devices seem unlikely to enjoy the success that was hoped for, at
least initially. In the United States, the average market price for an ultrabook was upwards of
US$900 during H112, compared to around US$500 for a Windows notebook.