IT spending to increase 1.4% led by devices and services

Worldwide spending on IT is expected to rise 1.4 per cent to $3.5 trillion (€3.29 trillion) this year, according to a new forecast from information technology research company, Gartner.

This growth rate is down from the previous quarter’s forecast of 2.7 per cent, due largely to currency fluctuations.

“The strong dollar has cut $67 billion out of our 2017 IT spending forecast,” said John-David Lovelock, research vice-president at Gartner. “We expect these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017.”

Driven by strong mobile phone sales and smaller improvements in sales of printers, PCs and tablets, worldwide spending on devices is projected to grow 1.7 per cent this year to $645 billion.

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Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud

Mobile-phone growth will largely be driven by increased average selling prices for devices in emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the smartphone.

Tablet market

Gartner said the tablet market continues to decline significantly, as replacement cycles remain extended. Both sales and ownership of desktop PCs and laptops are negative throughout the research firm’s forecast.

The company expects worldwide IT services market spending to grow 2.3 per cent in 2017, down from 3.6 per cent growth in 2016.

Separately, the data centre segment is expected to rise by 0.3 per cent this year. While this is up from negative growth in 2016, the segment is experiencing a slowdown in the server market.

“We are seeing a shift in who is buying servers and who they are buying them from,” said Mr Lovelock.

"Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data centre system segment," he added.