Canadian Underwriter

Worldwide IT spending forecast to increase just 0.6% from 2015: Gartner

January 18, 2016   by Canadian Underwriter

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Worldwide information technology spending is forecast to total US$3.54 trillion dollars in 2016, just a 0.6% increase over 2015 spending of US$3.52 trillion dollars, according to IT research and advisory company Gartner, Inc.

2014 IT spending levels won’t be surpassed until 2019, Gartner predicted

Last year saw the largest United States dollar drop in IT spending since Gartner began tracking IT spending. US$216 billion dollars less was spent on IT in 2015 compared to 2014 and 2014 spending levels won’t be surpassed until 2019, Gartner said in a press release on Monday.

“The rising U.S. dollar is the villain behind 2015 results,” said John-David Lovelock, research vice president at Gartner, in the release. “U.S. multinationals’ revenue faced currency headwinds in 2015. However, in 2016 those headwinds go away and they can expect an additional 5% growth.”

The Gartner Worldwide IT Spending Forecast analyzes major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies, Gartner explained.

The spending forecast predicted that the devices market (PCs, ultramobiles, mobile phones, tablets and printers) is forecast to decline 1.9% in 2016.

Data center systems’ spending is projected to reach US$75 billion in 2016, a 3% increase from 2015. The server market is the segment that has seen the largest change since the previous quarter’s forecast. The server market has seen stronger-than-expected demand from the hyperscale sector, which has lasted longer than expected, Gartner added, referring to a computing environment in which architecture can scale appropriately as increased demand is added to the system. Typically, this segment has spikey demand which lasts for a couple of quarters before moderating, but demand in this segment is expected to continue to be strong through 2016, Gartner said.

The worsening economic environment in emerging markets has had little effect on the global enterprise software spending forecast for 2016, with IT spending on pace to total US$326 billion, a 5.3% increase from 2015.

Spending in the IT services market is expected to return to growth in 2016, following a decline of 4.5% in 2015. IT services spending is projected to reach US940 billion in 2016, up 3.1% from 2015. “This is due to accelerating momentum in cloud infrastructure adoption and buyer acceptance of the cloud model,” the release said.