Gartner predicts IT spending to grow, but only just
Enterprises are spending a less than anticipated amount of money on IT, according to the latest tidbit from Gartner.
The analyst firm blames price pressure due to increased competition, a lack of product differentiation, and widespread availability of viable alternatives as the biggest cause of reduced spending in 2014.
What this means is that global IT spending growth will rise by just 2.1 percent to $3.7 trillion, up from $3.62 trillion last year. Gartner’s previous estimate for this year had IT spending rising by 3.2 percent (to $3.74 trillion) – the total difference being a not inconsiderable $40 billion.
The good news is in the enterprise sector, where software sales are set to grow faster than any other segment. Gartner says it now expects 6.9 percent growth in enterprise software, to $321 billion. A demand for database management software is one of the main driver for this growth, but spending on applications like office suites and digital content creation software will slow.
IT services aren’t faring all that well – Gartner expects growth of just 3.8 percent to $967 billion this year. It says that services are being hit by public cloud vendors eating into the business of traditional data center outsourcers, and the slow pace of IT outsourcing in general.
Hardware is another weak area. Spending in this segment, which includes PCs, smartphones and tablets, will see just 1.2 percent growth to $685 billion. Part of the reason for this is that devices are getting cheaper – Gartner says that half of all US homes now possess at least one tablet, and as such, the next wave of adopters will likely look for low cost devices.
Telecoms services will also see sluggish growth. Sales are expected to rise just 0.7 percent, even though it will remains IT’s single most value segment at $1.6 trillion.
Finally, data center systems is expected to be the worst-performing segment in the entire industry. Gartner says sales growth here will slow to just 0.4 percent, or $140 billion. Restricted IT budgets plus an overall trend to shun high-cost servers for low-end systems are the primary drivers of this.
In the longer term, Gartner says that things should improve with a return to what it calls “normal” IT spending from 2015 to 2018. Over that period, it says global IT spending should rise by 3.7 percent, topping $3.8 trillion.
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