Worldwide IT spending to grow 2.4 percent in 2017

Published on the 17/07/2017 | Written by Newsdesk


enterprise software spending

Driven by enterprise software – and Australia and New Zealand outstrip global average…

Worldwide IT spending has received a substantial fillip with Gartner’s projection of a total of US$3.5 trillion in 2017. That’s 2.4 percent more than 2016 and up over its previous quarter’s forecast of 1.4 percent. The market watcher put the expanded growth down to a U.S. dollar decline against many foreign currencies. It also noted that enterprise software is the fastest growing category of spending, forecast to grow 7.6 percent in 2017, up from 5.3 percent in 2016.

“Digital business is having a profound effect on the way business is done and how it is supported,” said Gartner VP John-David Lovelock in a statement. “The impact of digital business is giving rise to new categories; for example, the convergence of ‘software plus services plus intellectual property’.”

Lovelock said these ‘next-generation’ offerings are fueled by business and technology platforms that will be the driver for new categories of spending. Industry-specific disruptive technologies include the Internet of Things (IoT) in manufacturing, blockchain in financial services (and other industries), and smart machines in retail. “The focus is on how technology is disrupting and enabling business.”

Commenting on the substantial growth in enterprise software, Gartner said that as software applications allow more organisations to derive revenue from digital business channels, there will be a stronger need to automate and release new applications and functionality.

“With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management [ITOM] tools that are also delivered from the cloud,” said Lovelock. “These cloud-based tools allow infrastructure and operations [I&O] organisations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles. If the I&O team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions.”

IT spending increased in 2016, but Gartner noted that only two of the top 10 IT vendors posted organic revenue growth. With revenue sources still tied to the Nexus of Forces (the convergence of social, mobility, cloud and information), it said some of the top 10 vendors will fare better in 2017 due to strength in mobile phone sales.

Worldwide spending on devices (PCs, tablets, ultramobiles and mobile phones) is projected to grow 3.8 percent in 2017, to reach $654 billion. This is up from the previous quarter’s forecast of 1.7 percent. Mobile phone growth, said Gartner, will be driven by increased average selling prices (ASPs) for premium phones in mature markets due to the 10th anniversary of the iPhone and the increased mix of basic phones over utility phones.

However, the tablet market continues to decline, as replacement cycles remain extended.

Access the Gartner Worldwide Spending Forecast.

 

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