Worldwide IT spending forecast to grow – Gartner

Gartner says worldwide IT spending is forecast to grow by 1.4% in 2017

Worldwide IT spending forecast to grow - Gartner

'Organisations are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft'

Worldwide IT spending is projected to total $3.5 trillion in 2017, a 1.4% increase from 2016, according to Gartner, Inc. This growth rate is down from the previous quarter’s forecast of 2.7%, due in part to the rising US dollar (see Table 1.)

“The strong US dollar has cut $67 billion out of our 2017 IT spending forecast,” said John-David Lovelock, research vice president at Gartner. “We expect these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017.”

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets.

For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognise market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

>See also: Gartner’s 2017 forecasts

The data centre system segment is expected to grow 0.3% in 2017. While this is up from negative growth in 2016, the segment is experiencing a slowdown in the server market.

“We are seeing a shift in who is buying servers and who they are buying them from,” said Mr Lovelock. “Organisations are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data centre system segment.”

Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)

2016

Spending

2016

Growth (%)

2017

Spending

2017

Growth (%)

2018 Spending2018 Growth (%)
Data Centre Systems171-0.11710.31731.2
Enterprise Software3325.93515.53767.1
Devices634-2.66451.76561.7
IT Services8973.69172.39614.7
Communications Services1,380-1.41,376-0.31,3941.3
Overall IT3,4140.43,4601.43,5592.9

Source: Gartner (April 2017)

Driven by strength in mobile phone sales and smaller improvements in sales of printers, PCs and tablets, worldwide spending on devices (PCs, tablets, ultramobiles and mobile phones) is projected to grow 1.7% in 2017, to reach $645 billion.

This is up from negative 2.6% growth in 2016. Mobile phone growth in 2017 will be driven by increased average selling prices (ASPs) for phones in emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone.

>See also: The case for blowing this year’s IT budget

The tablet market continues to decline significantly, as replacement cycles remain extended and both sales and ownership of desktop PCs and laptops are negative throughout the forecast. Through 2017, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase.

The 2017 worldwide IT services market is forecast to grow 2.3% in 2017, down from 3.6% growth in 2016. The modest changes to the IT services forecast this quarter can be characterised as adjustments to particular geographies as a result of potential changes of direction anticipated regarding US policy — both foreign and domestic.

The business-friendly policies of the new US administration are expected to have a slightly positive impact on the US implementation service market as the US government is expected to significantly increase its infrastructure spending during the next few years.

Additional analysis will be presented during the complimentary webinar “IT Spending Forecast, 1Q17 Update: Vendor Reactions to Market Concentration,” taking place 11th April at 4pm BST.

During the webinar, Gartner analysts will explain the emergence of new vendors in existing markets, the shifts resulting from new offerings like cloud, and the toppling of the largest vendors and the impact on IT spending.

>See also: The digital ecosystem: IT infrastructure now on CEO’s agenda

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges.

The most recent IT spending forecast research is available at “Gartner Worldwide Spending Forecast.” This Quarterly IT Spending Forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

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