Good news for tech industry with prediction of significant rise in IT spending thanks to weak US dollar
Gartner has predicted that global IT spending is set to grow 6.2 percent to $3.7 trillion (£2.6 trillion) in 2018, compared to 2017.
The main reason for this growth according to the analyst house is down to the declining US dollar, but spending on IT around the world is growing at expected levels after a couple of tough years, and in line with expected global economic growth.
Gartner said that its 6.2 percent spending prediction is its highest annual growth rate that it has forecast since 2007.
Gartner believes there will be growth across most technology sectors including enterprise software; data centre systems, devices, IT services and communication services.
“Although global IT spending is forecast to grow 6.2 percent this year, the declining US dollar has caused currency tailwinds, which are the main reason for this strong growth,” said John-David Lovelock, research VP at Gartner. “This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth.”
The biggest predicted sector winners are communications services, IT services, and enterprise software.
Indeed, enterprise software spending is forecast to experience the highest growth in 2018 with an 11.1 percent increase, compared to 8.8 percent in 2017. Communication services are expected to grow 4.3 percent (compared to 1.3 percent in 2017); and IT services is forecast to grow 7.4 percent in 2018 (compared to 4.4 percent in 2017).
Spending on devices such as PCs, tablets and mobile phones is forecast to grow in 2018, reaching $706bn an increase of 6.6 percent from 2017.
“The device market continues to see dual dynamics,” said Lovelock. “Some users are holding back from buying, and those that are buying are doing so, on average, at higher price points.”
“As a result, end-user spending will increase faster than units through 2022,” predicted Lovelock. “However, total end-user spending and unit shipments are expected to be lower compared with previous forecasts, as demand for ultramobile premium devices, ultramobile utility devices and basic phones is expected to be slow.”
Meanwhile, global spending on data centre systems is forecast to grow 3.7 percent in 2018 – down from 6.3 percent in 2017. The longer-term outlook here continues to have challenges, particularly for the storage segment, said Gartner.
In the UK there was concern that Brexit could potentially hamper IT spending as organisations grappled with the prospect of life outside the bloc.
But last year research from Avanade suggested that IT directors are split on what strategy to employ in a post-Brexit world.
More than half (56 percent) said they were accelerating IT projects so they could be completed as quickly as possible in case of a doomsday scenario.
However 40 percent felt the best strategy was to wait and see what happens by slowing down or even cancelling projects altogether.