Expect increased emphasis on data storage and data networking in 2013, as well as the continued growth of mobile technology and cloud computing into ever-increasing numbers of business niches.
Spending on information technology is expected to top $2.1 trillion globally, up almost 6% from 2012, according to Framingham, Mass.-based market researcher International Data Corp. Tablet, eReader and smart-phone sales are pegged to grow by almost 20%, accounting for 57% of the IT growth.
Minitablets—those smaller than 8 inches—are expected to comprise 60% of the 170 million tablets projected to ship next year.
Software and services spending is forecast to grow 6% and 4%, respectively, while the PC and server markets are projected to post only modest gains in 2013.
Mergers and acquisitions will form another big storyline: IDC projects more than $25 billion in deals in the next 20 months, with the pursuit of cloud services a big driver of many transactions. The cloud-services market is on a meteoric rise, as data demands surge in the corporate, consumer and data-center segments.
IDC forecasts companies will spend $100 billion on IT cloud services by 2016. That’s up from a projected $40 billion this year, representing compound annual growth eclipsing 26%.
Several OC technology companies, including rival computer equipment makers Emulex Corp. in Costa Mesa and Aliso Viejo-based QLogic Corp., are tied to the growth of cloud services and data centers.
Investments tied to data needs—or “big data” transactions”—are pegged to grow to almost $10 billion in 2013, as venture capitalists and M&A firms target analytics and discovery applications.
Other big trends to keep an eye on in 2013: a push to use personal devices in the workplace and campaigns to protect and monetize intellectual property.
PERSON TO WATCH: STEVE MILLIGAN
Western Digital Corp.’s incoming chief executive, Steve Milligan, is set to inherit the leadership position of one of Orange County’s most well-run technology companies.
Milligan will have some big shoes to fill when he takes over for outgoing Chief Executive John Coyne, who announced his retirement in September. In 2012, Coyne completed Western Digital’s $4.3 billion buy of Hitachi Global Storage Technologies Ltd.—its priciest acquisition to date—even as he oversaw recovery efforts in the wake of devastating floods that crippled key operations in Thailand for months.
Milligan’s prior tenure at Hitachi Global—which he joined as chief financial officer before rising to chief executive—earned him credit for reshaping the unprofitable, mismanaged unit of Japan-based Hitachi Ltd. into a thriving global competitor and spinoff candidate. Wall Street has given the Western Digital succession plan a thumbs-up, based on Milligan’s experience aligning operations in the typically erratic disk-drive market, where demand can swing significantly from quarter to quarter.
“Mr. Milligan has a strong track record,” Mark Moskowitz, an analyst in the San Francisco office of New York-based JPMorgan Chase & Co., wrote in a research note.
“He proved himself as (Hitachi) CEO,” Jayson Noland, senior analyst in the San Francisco office of Milwaukee-based Robert W. Baird & Co., told the Business Journal. “I think this will be a well-executed transition.”
COMPANY TO WATCH: CLEAN ENERGY FUELS CORP.
Some analysts and industry watchers have pegged 2013 as a turning point for the natural-gas market.
No other Orange County company is poised to benefit from the shift to the cheaper and cleaner fuel source than Seal Beach-based Clean Energy Fuels Corp., the largest builder and operator of natural-gas stations in the U.S.
The company is expanding what it calls America’s Natural Gas Highway, with major transportation arteries in California, Texas and the Midwest pegged for natural-gas stations spread out every 250 miles or so when the multiyear project concludes.
Clean Energy will build 125 stations this year, up from 60 in 2011. About 70 of those stations are part of the natural-gas highway. Dozens more are in the works for 2013.
“We’re still in the early innings of growth,” Chief Executive Andrew Littlefair told the Business Journal.
The company hit nearly $235 million in sales through the first nine months of the year, up 13.8% from the same period a year ago.
Clean Energy has yet to reach profitability despite the strong revenue gains, as it continues to put large sums into its infrastructure projects.
It is targeting the largest segment of the market: heavy-duty haulers that consume some $30 billion of fuel annually. The company has struck several major deals in the last year with municipalities, trucking companies, automakers and waste-management firms as it builds out fueling infrastructure.
