Political uncertainty in global markets to have an impact on IT spending: Gartner report

MUMBAI: IT research and advisory company Gartner has today released a report on the Worldwide IT spending, which is projected to a total $3.5 trillion in 2017, a 2.7 percent increase from 2016. However, Gartner has also noted that this growth rate is down from earlier projections of 3 percent.

“2017 was poised to be a rebound year in IT spending. Some major trends have converged, including cloud, blockchain, digital business and artificial intelligence. Normally, this would have pushed IT spending much higher than 2.7 percent growth,” said John-David Lovelock, research vice president at Gartner. "However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments."

Worldwide devices spending (PCs, tablets, ultramobiles and mobile phones) is projected to remain flat in 2017 at $589 billion. A replacement cycle in the PC market and strong pricing and functionality of premium ultramobiles will help drive growth in 2018. Emerging markets will drive the replacement cycle for mobile phones as smartphones in these markets are used as a main computing device and replaced more regularly than in mature markets.

The worldwide IT services market is forecast to grow 4.2 percent in 2017. Buyer investments in digital business, intelligent automation, and services optimization and innovation continue to drive growth in the market, but buyer caution, fueled by broad economic challenges, remains a counter-balance to faster growth.

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

Source: Gartner (January 2017)

"The range of spending growth from the high to low is much larger in 2017 than in past years. Normally, the economic environment causes some level of division, however, in 2017 this is compounded by the increased levels of uncertainty," said Mr. Lovelock. "The result of that uncertainty is a division between individuals and corporations that will spend more — due to opportunities arising — and those that will retract or pause IT spending."

For example, says Gartner, aggressive build-out of cloud computing platforms by companies such as Microsoft, Google and Amazon is pushing the global server forecast to reach 5.6 percent growth in 2017. This was revised up 3 percent from last quarter's forecast and is sufficient growth to overcome the expected 3 percent decline in external controller-based storage and allow the data center systems segment to grow 2.6 percent in 2017.