According to Gartner, worldwide IT spending is projected to reach $3.8 trillion in 2014, witnessing a growth of 3.1 per cent over 2013. In 2013, the overall IT spending stood at $3.7 trillion registering a year over year growth of 0.4 per cent.
The research firm forecasts that the spending on devices (including PCs, ultra mobiles, mobile phones and tablets) contracted 1.2 per cent in 2013, but the market is expected to expand at a growth rate of 4.3 per cent in 2014. Convergence of the PC, ultra mobiles (including tablets) and mobile phone segments, as well as erosion of margins, will come to fore in 2014 as differentiation between products will be primarily on the basis of price instead of devices? orientation to specific tasks.
Enterprise software spending will continue to witness growth and is expected to grow at 6.8 per cent. Customer relationship management and supply chain management (SCM) will attract high investment. Organisations will invest heavily in analytics tools to make business to customer processes more efficient and for improving customer marketing efforts. Investment will also be aligned to business to business analytics, particularly in the SCM space, where annual spending is expected to grow 10.6 per cent in 2014. The focus would be on enhancing the customer experience throughout the presales, sales and post sales processes.
Last quarter, Gartner?s forecast for 2014 IT spending growth was 3.6 per cent, a 0.5 percentage points higher than the current forecast. The research firm attributes a downward revision of the 2014 forecast growth in spending for telecom services, a segment which accounts for more than 40 per cent of total IT spending, from 1.9 per cent to 1.2 per cent as the key reason for reduction in overall IT spending in 2014. The decline in telecom spending is on account of a number of factors. A few of these include faster-than-expected growth of wireless-only households, declining voice tariffs in China a more frugal usage pattern among European customers accompanied by intense competition to lower tariffs amongst operators to retain existing customers and attract new ones.
In fact, Gartner has reduced data centre systems spending growth outlook for 2014 from 2.9 per cent in its previous forecast to 2.6 per cent. This is mainly due to a reduction in the forecast for external controller-based storage and enterprise communications applications. These segments represent 32 per cent of total data centre system end-user spending.
Gartner has also lowered 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 co-location, hosting and data centre outsourcing growth rates. Majority of the chief information officers are increasingly reconsidering data center build-out and instead planning faster-than-expected moves to cloud computing. Despite these reductions, Gartner expect data centre segment to continue witness annual growth of four to five per cent through 2017.?
