Published on the 13/01/2015 | Written by Beverley Head
Enterprise software is a standout in Gartner’s 2015 IT spending forecast – though market competition and consolidation may threaten some vendors’ coffers…
IT analyst Gartner has this week released its 2015 worldwide IT spending forecast, predicting overall growth of 2.4 percent during the year, taking total revenues to $US3.8 trillion.
Because of the strengthening US currency this growth is down on the earlier prediction of a 3.9 percent growth rate, but Gartner has sheeted the blame for that almost entirely to the stronger US dollar.
Fastest growth of all is predicted for enterprise software, with spending tipped to rise 5.5 percent to $US335 billion.
However Gartner warns that; “More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers. In particular, in the customer relationship management (CRM) market, a key cloud battleground, seat prices for segments such as sales force automation are expected to decline by 25 percent through 2018.
“This will be caused by incumbent on-premises vendors discounting their cloud offerings heavily to try and maintain their customer base. There will also be increased price competition from cloud offerings in other areas such as database management system and application infrastructure and middleware, albeit at a somewhat slower and weaker pace than for CRM.”
While the competition may impact vendor revenues, it will deliver enterprise users with greater opportunity to negotiate.
If competition in enterprise software seems cut-throat, spare a thought for the advertising sector where traditional media continues to be assaulted by online alternatives.
A study released this week by Frost & Sullivan scopes the rising demand for online advertising in Australia. While there were no New Zealand numbers available from the study it is probably fair to say that the trend is similar to that across the ditch where the Australian online general advertising market will grow by 16 percent a year until 2018 when it will reach $A 2.4 billion – up from $A1.15 billion in 2014.
Online video is rising even faster – up 60 percent last year in Australia.
But consumer and enterprise appetite for mobile devices (again reflected in Gartner’s 2015 global spending forecast) is also driving strong demand for mobile advertising.
Gartner says demand for smartphones remains robust, and has predicted that a further 233 million tablets will be sold globally in 2015 – eight percent more than last year.
Recognising this additional mobile venue for consumer engagement sees Frost & Sullivan predict that online mobile advertising revenues will rise 27 percent a year in Australia until 2019, when it will be worth $A900 million.
