Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 6.2 per cent over 2017, research and analyst firm Gartner said in a report on Monday revising its earlier projection upward. This is the highest annual growth rate that Gartner has forecast since 2007 which signals a new cycle of IT growth, the research firm added.
In an earlier report released in this January, Gartner had projected 4.5 per cent growth in worldwide IT spending.
“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 vice president at Gartner. The research said however said that the US Dollar is expected to trend stronger in 2018 and 2019 despite the uncertain political environment, renegotiation of the North American Free Trade Agreement and the possibility of trade wars.
As technology companies increasingly tap into digital business from emerging technologies, spending on enterprise software will see the highest growth of 11.1 per cent amounting to almost $190 billion. Application software spending is expected to continue to rise through 2019, and infrastructure software will also continue to grow, bolstered by modernization initiatives, the report added.
Bloomberg had noted in a report last week that apart from Accenture and IBM, which generate more than 50 per cent of their sales from emerging technologies, most companies are far behind in their exposure to cloud, analytics and security, which remain the primary growth drivers for the industry. Increased investments in this area will have some negative impact on margins. Bloomberg also noted that Demand for cloud-based services should remain strong, propelling greater sales growth for the industry, both in applications and infrastructure.
Consequently, Gartner expects 3.7 per cent growth in data centre spending in 2018, down from 6.3 percent growth in 2017. The longer-term outlook continues to have challenges, particularly for the storage segment.
Worldwide spending for devices like PCs, tablets and mobile phones is forecast to grow in 2018, reaching $706 billion, an increase of 6.6 per cent from 2017. "The device market continues to see dual dynamics. Some users are holding back from buying, and those that are buying are doing so, on average, at higher price points," said Lovelock.
"As a result, end-user spending will increase faster than units through 2022. 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 are expected to be slow."