UPDATED 13:35 EDT / OCTOBER 19 2016

INFRA

Gartner: Global IT spending will grow 2.9 percent in 2017

It looks like the IT industry is starting to regain its old momentum. After an estimated 0.3 percent decline in enterprise technology investment this year due to uncertainty caused by the Brexit referendum, Gartner Inc. expects to see a 2.9 percent spending jump during 2017.

The research firms published its findings in a new report today that credits much of the expected increase to fast-rising demand for software and IT services. In the former segment, Gartner expects to see spending climb 6 percent this year and another 7.2 percent during 2017 months until reaching $357 billion annually. Its forecast comes as more and more organizations are substituting their expensive, proprietary data center equipment with white-box systems running sophisticated management software. This trend is especially pronounced among large enterprises with cross-region infrastructure footprints.

Meanwhile in the services market, the other major growth driver identified by today’s forecast, Gartner sees spending rising 4.8 percent during 2017 to $943 billion. The rest of the IT industry is expected to follow behind with considerably smaller gains. Demand for data center hardware is set to increase by a fairly underwhelming 2 percent to 177 billion, while spending on various user endpoints like workstations is projected to climb just 0.2 percent from 2016. However, that’s still a significant improvement over the 7.5 percent decline that the industry is estimated to see this year due to the accelerating shift from PCs to mobile devices.

The data becomes even more revealing when broken down by region. Gartner research vice president John-David Lovelock told Computerworld that “emerging Asia Pacific countries, sub-Saharan Africa and greater China” are expected to lead the pack in 2017 with an IT spending increase of more than 4.5 percent, while North American organizations will hike their spending by 2.5 percent. Japan and Europe in turn came out at the bottom of the list with a projected growth rate below 2 percent. It appears that the results of the Brexit vote will continue to influence the market for the foreseeable future.

“We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat,” Gartner’s Lovelock detailed in a prepared statement. “There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the U.K. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the U.K.”

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