October 19, 2016 by Canadian Underwriter
Driven by growth in software and IT services revenue, worldwide IT spending is forecast to reach US$3.5 trillion in 2017, up 2.9% from 2016 estimated spending of US$3.4 trillion, according to the latest forecast by Gartner, Inc.
Gartner, an information technology research and advisory company, said in a press release on Wednesday that the “bright spot” for the IT industry has been the software and IT services segments. Software spending is projected to grow 6% in 2016, and it will grow another 7.2% in 2017 to total US$357 billion. IT services spending is on pace to grow 3.9% in 2016 to reach US$597 billion, and increase 4.8% in 2017 to reach US$943 billion.
Gartner analysts are discussing the key IT and business issues that are driving the evolution of digital business this week during Gartner Symposium/ITxpo through Thursday. There has been interest among attendees regarding what impact the United Kingdom’s exit from the European Union, known as Brexit, will have on IT investment, Gartner said in the release.
“The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016,” said John-David Lovelock, research vice president at Gartner. “Without the U.K., global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the U.K. included, IT spending is expected to decrease 0.3 percent. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.”
Companies will be monitoring negotiations closely, and there will be some changes in IT investment, Gartner said in the release. For example, in the financial services sector, analysts expect to see some countries in Europe put more investment in IT to offer a more viable option for EU countries than the U.K.
“We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat,” Lovelock said. “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.”