Gartner Lowers IT Spending Forecast

Worldwide spending on IT devices and services will fall 0.5% YoY in 2016, says Gartner, to reach a total of $3.49 trillion (from $3.5 trillion). The new forecast is a revision from the previous projection of 0.5% growth – mainly due to currency fluctuations.

Economic uncertainty is driving companies to act conservatively when it comes to spending, says Gartner’s John-David Lovelock. Conversely, the need to invest in IT to support digital business is “more urgent than ever”. Because of this, business leaders are optimising costs, by cutting budgets in some areas (for example, legacy system optimisation) to fund digital business in others.

Typically, less than 10% of businesses are optimising or cutting costs, said Lovelock. However, the need to spend on digital business – at a time when IT budgets are restricted – is forcing more to optimise.

As we reported recently (Smartphones Falling, but PCs Will Rebound), the device market is forecast to fall 3.7% in 2016. Smartphones are approaching global saturation, which is slowing growth. PCs and ultramobiles are expected to fall.

Spending will vary in other sectors. Gartner predicts a rise in data centre spending (2.1%, to $175 billion), global enterprise software (4.2%, to $321 billion) and IT services (2.1%, to $929 billion). However, telecom service spending will fall 2%, to $1.4 trillion.

Worldwide IT Spending Forecast ($ Billions)
Market 2015 Spending 2016 Spending 2015 Growth 2016 Growth
Devices 650 626 -6.4% -3.7%
Data Centre Systems 171 175 2.9% 2.1%
Software 308 321 -1.9% 4.2%
IT Services 910 929 -4.7% 2.1%
Communications Services 1,470 1,441 -8.4% -2.0%
Overall IT 3,509 3,492 -6.0% -0.5%
Source: Gartner