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IT spend shutters as buyers look acquire more services

Chris Player | Jan. 16, 2017
The worldwide IT services market is forecast to grow 4.2 per cent in the coming year

Worldwide IT spending is set to hit $US3.5 trillion in 2017, according to the latest research from analyst firm, Gartner. But the latest projection is 10 per cent down on previous estimates.

In contrast, the worldwide IT services market is forecast to grow 4.2 per cent in the coming year. Gartner said investments in digital business, intelligent automation, and services optimisation and innovation continue to drive growth in the market, but buyer caution, fuelled by broad economic challenges, remains a counter-balance to faster growth.

Gartner research vice president, John-David Lovelock, said 2017 was poised to be a rebound year in IT spending and major trends including cloud, blockchain, digital business, and artificial intelligence have emerged.

“Normally, this would have pushed IT spending much higher than 2.7 percent growth," he said. "However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments.

"The range of spending growth from the high to low is much larger in 2017 than in past years. Normally, the economic environment causes some level of division, however, in 2017 this is compounded by the increased levels of uncertainty.

"The result of that uncertainty is a division between individuals and corporations that will spend more — due to opportunities arising — and those that will retract or pause IT spending."

Gartner pointed to the aggressive build-out of cloud computing platforms by companies such as Microsoft, Google and Amazon pushing the global server forecast to reach 5.6 per cent growth in 2017. This figure was revised up three per cent from last quarter's forecast and is sufficient growth to overcome the expected three per cent decline in external controller-based storage and allow the datacentre systems segment to grow 2.6 per cent in 2017.

Simultaneously, devices spending is expected to remain flat in 2017 at $US589 billion. However, Gartner also predicts that a replacement cycle in the PC market, coupled with strong pricing and functionality of the new breed of portable devices, will help drive growth in 2018.

Emerging markets will contribute the most to this replacement cycle as smartphones in these markets are used as a main computing device and are replaced more regularly than in mature markets.

 

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