IT hardware and software companies expect to see most of their revenue coming this year from the U.S. market, which is a reversal from the last two years when China and India led, according to KPMG in its annual survey of the technology business climate.
KPMG, an audit, tax and advisory firm, found in its survey that the U.S. market will provide the highest percentage of revenue and employment growth over the next 12 months, besting China, Brazil and India in both areas.
But this KPMG survey of 102 C-level or senior executives at hardware and software companies also dampens expectations about hiring .
Coming out of the recession in 2010, 72% of those surveyed last year anticipated an increase in their firm's headcount. But in this survey, taken in May and June, the executives were less optimistic about the outlook, with 49% predicting a headcount increase this year.
Of the respondents, 71 are at companies with revenues of more than $1 billion and 31 are at firms in the $100 million to $1 billion revenue range.
Overall, 27% of those surveyed said headcount had reached or exceeded pre-recession levels, and 42% of the respondents said headcount would return to pre-recession levels over the next 18 months, but 21% said it would never return to those levels -- "at least in the short-term, they've outsourced more activities," said Gary Matuszak, partner, global chair and U.S. leader for KPMG's Technology, Communications & Entertainment practice.
In last year's survey, respondents believed that the U.S. recovery would take hold in 2012. But this new survey pushes that expectation out to 2013. "The executives, historically, have been overly optimistic about when the recovery might happen," Matuszak said.
The survey also ranked cloud computing as the top revenue driver at 65%, from 54% in the prior year.
From the buyer side, Computer Economics surveyed more than 200 IT executives in the first quarter of this year for its annual IT Spending and Staffing Benchmark study. Just released, it found that 60% of the respondents planned to increase their operational budgets, and 22% had plans to decrease their budgets. The remainder 18%, plan to keep their IT budgets the same. But that's an improvement from last year when 44% indicated plans to decrease IT spending.
But median annual growth of IT operational budgets in 2011 was put at 2%. Prior to the recession, in 2008, the growth was 4%. "We're seeing subtle improvements across the board," said John Longwell, the firm's vice president of research.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is [email protected] .
Read more about it industry in Computerworld's IT Industry Topic Center.