Gartner Lowers IT Outlook, But Still Above 2013 Spend PDF Print E-mail
Written by Mike Buetow   
Wednesday, 08 January 2014 08:40

STAMFORD, CT -- Worldwide IT spending is expected to grow 3.1% to $3.8 trillion in 2014, up from 0.4% in 2013. Demand for devices and data center systems will grow 4.3% and 2.6% respectively, both well over 2013 spending, research firm Gartner said.

The forecast is 0.5 points lower than Gartner's forecast last quarter of 3.6% for 2014.

Overall spending on devices (including PCs, ultramobiles, mobile phones and tablets) fell 1.2% in 2013, Gartner said, but convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, will take place as differentiation will soon be based primarily on price instead of devices' orientation to specific tasks.

Enterprise software spending growth continues to be the strongest throughout the forecast period. The 2014 annual growth rate is expected to grow 6.8%. Customer relationship management and supply chain management (SCM) experienced a period of strong growth.

“Investment is coming from exploiting analytics to make B2C processes more efficient and improve customer marketing efforts. Investment will also be aligned to B2B analytics, particularly in the SCM space, where annual spending is expected to grow 10.6% in 2014,” said Richard Gordon, managing vice president at Gartner. “The focus is on enhancing the customer experience throughout the presales, sales and post sales processes.”

Table 1. Worldwide IT Spending Forecast 


2013

Spending

2013

Growth (%)

2014

Spending

2014

Growth (%)

Devices

669

-1.2

697

4.3

Data Center Systems

140

-0.3

143

2.6

Enterprise Software

300

5.2

320

6.8

IT Services

922

1.8

963

4.5

Telecom Services

1,633

-0.5

1,653

1.2

Overall IT

3,663

0.4

3,777

3.1

Source: Gartner, January 2014. In US billions.

 

"A downward revision of the 2014 forecast growth in spending for telecom services — a segment that accounts for more than 40% of total IT spending — from 1.9% to 1.2% is the main reason behind this overall IT spending growth reduction," said Gordon. "A number of factors are involved, including the faster-than-expected growth of wireless-only households, declining voice rates in China and a more frugal usage pattern among European customers. The latter coincides in Western Europe with a breakout of fierce price competition among communications service providers to retain customers and attract new ones."

The data center systems spending growth outlook for 2014 has been cut from 2.9% in our previous forecast to 2.6%. This is mainly due to a reduction in the forecast for external controller-based storage and enterprise communications applications. These segments represent 32% of total data center system end-user spending.

Gartner has slightly revised downward the IT services compound annual growth rate between 2012 and 2017. The largest contributor to this revision comes from reductions in IT outsourcing — specifically, in colocation, hosting and data center outsourcing growth rates. "We are seeing CIOs increasingly reconsidering data center build-out and instead planning faster-than-expected moves to cloud computing. Despite these small reductions, we continue to anticipate consistent four to five percent annual growth through 2017," said Mr. Gordon.

The company will present its analysis on the IT outlook in a webinar on Jan. 14 at 11 am EDT. To register, visit http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=2633234&ref=Webinar-Calendar.

 

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