IT spending sluggish, enterprise software and services shine

Published on the 04/10/2017 | Written by Newsdesk


Tech spending sluggish

Global spending to increase a modest 4.3 percent; digital transformation a factor…

Worldwide IT spending is projected to reach a total of US$3.7 trillion in 2018, which marks an increase of 4.3 percent from over 2017’s numbers which are expected to top US$3.5 trillion. Those figures are courtesy of market watcher Gartner, Inc’s latest forecast.

The analyst said the bright spots which are driving growth are enterprise software and IT services, and communications services, which are continuing to drive the majority of spending. Software spending is projected to grow 8.5 percent in 2017, and it will grow another 9.4 percent in 2018 to total US$387 billion (see Table 1). IT services spending is on pace to grow 4 percent in 2017 to reach US$931 billion, and increase 5.3 percent in 2018 to reach US$980 billion.

By contrast, enterprise hardware is in the doldrums: data centre systems are becalmed at 1.7 percent growth this year, with a meagre increase to 1.8 percent in 2018.

Not that we at iStart are terribly interested in PCs, tablets and other gadgets, but the devices segment is showing some resurgence for the first time in recent memory. Gartner said it expects devices to exhibit growth for the first time in two years with an increase of 5.3 percent in 2017 and 5 percent in 2018.

It sheeted that rebound home to increased average selling prices for premium phones in mature markets, partially due to the introduction of the iPhone 8 and 10, along with an underlying demand for PCs from businesses replacing their machines with Windows 10 PCs.

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

  2017 Spending 2017 Growth (%) 2018 Spending 2018 Growth (%)
Data Centre Systems 173 1.7 176 1.8
Enterprise Software 354 8.5 387 9.4
Devices 664 5.3 697 5.0
IT Services 931 4.0 980 5.3
Communications Services 1,387 0.9 1,417 2.2
Overall IT 3,508 3.3 3,658 4.3

Source: Gartner (October 2017)

While all IT spending segments are expected to experience growth in 2017, Gartner has identified 10 markets within these segments that will make up the most dynamic portion of the IT spending forecast in 2018.

“Looking at market opportunity — how profitable a market is, how big it is and how fast is it growing today and for the next five years — we have identified the top markets that companies should be looking to be part of in 2018,” said John-David Lovelock, Gartner research VP in a statement.

“Global IT spending is showing little overall growth, as are traditional markets. These top 10 markets will be the key to remaining relevant and achieving growth in the future.”

These 10 markets — including three cloud segments (infrastructure as a service [IaaS], integrated platform as a service [iPaas] and communications platform as a service [cPaaS]) — range from technologies that enhance the digital workplace, such as workstream collaboration, workforce analytics and video message-oriented middleware (MOM), to security (endpoint detection and response), analytics (smart data discovery) and storage (in-memory data grids).

All are tied to enabling and enhancing an enterprise’s digital transformation efforts.

“The IT buying landscape is changing: Digital business transformation is an effort to create connected, platforms and new industry revenue streams,” said Lovelock. “Organisations that are not creating new digital business models or new ways to engage constituents or customers, are falling behind. Those vendors that do not move more quickly than their clients, will be left behind.”

Post a comment or question...

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.


Follow iStart to keep up to date with the latest news and views...



MORE NEWS: