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According to the firm, software spending will grow 10% to $408 billion. "Most companies updated their software systems during the period 1997 through 2001, as a result we are in the middle of an upgrade cycle that should extend past the end of this decade," says Joanne Correia, managing vice president at Gartner.

But

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she warns that new systems do not necessarily mean growth in the software market, as Software as a Service (SaaS), cloud computing and open-source software are changing the shape of the market. "Many of these factors are impacting market growth as enterprises replace assets with per-use services."

The jump in software spending is also expected help drive growth in IT services, as companies need to pay someone to implement new programs. Because of this, and moves to improve efficiency, Gartner claims IT services will see 9.4% growth to $819 billion this year.

The hardware market will be worth $408 billion globally this year, with PCs the main growth area, worth about 60% of the market.

"A strong shift to mobile PCs is occurring. The higher prices of these products result in increasing revenue per unit and a boost to the overall market," the report concludes.