5 Areas of IT Spending and What They Say About the Market in 2017
Gartner has released its latest forecast for global IT spending in 2017. Overall IT spending will reach $3.5 trillion in 2017, up 2.9 percent from 2016 estimated spending of $3.4 trillion, Gartner said.
While overall IT spending is growing, the bright spots are software and IT services spending in particular which are set to grow 7.2 percent and 4.8 percent in 2017, respectively.
Cloud computing platform build-outs by Microsoft, Google and Amazon is pushing the global server forecast to reach 5.6 percent growth in 2017.
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“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,” John-David Lovelock, research vice president at Gartner said in a statement. “However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments.”
Increased levels of uncertainty contribute to the spending forecast for 2017, and are a bigger factor than usual, as Lovelock notes.
“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 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.”
Gartner analysts note that the news could have been more positive if the U.K. wasn’t included in its analysis. Gartner says that Brexit, and the worries it brings for businesses operating in the U.K., are having an impact on the numbers.
“Without the U.K., global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the U.K. included, IT spending is expected to decrease 0.3 percent,” Lovelock said. “The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.”
Gartner says that some countries in Europe, including Germany and France, are increasing IT spend to contend for some business that may have gone to the U.K.
“We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat,” Lovelock said. “There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the U.K. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the U.K.”
To see the 5 areas of IT spending that Gartner measures, and how much they are projected to grow in 2017, please click through the slideshow. All figures are in U.S. dollars.
This article has been updated as of Jan. 12, 2017 to include additional quotes and data points.