Worldwide IT spending to decline 1.3 percent in 2015: Gartner

|April 13, 2015 0

NEW DELHI, INDIA: Worldwide IT spending is set to shrink to $3.66 trillion in 2015, a 1.3 percent decrease from 2014, according to the latest forecast by Gartner. The rising dollar is chiefly responsible for the slowdown, it said.

 

Devices

The U.S. dollar spending on devices (including PCs, ultramobiles, mobile phones, tablets and printers) for 2015 is forecast to decline 1.2 percent to $685 billion. Spending for all devices in 2015 was revised down partly due to a slowdown in PC purchases in Western Europe, Russia and Japan, countries where local currency has devalued against the dollar. The mobile phone market is not as affected by the currency shifts. Substantial change in the phone mix in emerging markets toward lower-priced smartphones negates price increases of premium phones, resulting in flat phone average selling prices between 2014 and 2015.

 

Data center

Data center system spending is projected to reach $142 billion in 2015, an increase of just 0.4 percent from 2014. External controller-based storage, enterprise network equipment and servers have all been impacted by the depreciation of some local currencies against the U.S. dollar, but the server segment has seen the biggest impact due to the greater pricing pressure that server vendors are exposed to, due to their relatively lower margins.

 

Enterprise software

Spending in the enterprise software market is on pace to total $320 billion in 2015, a 2.3 percent increase from 2014. Nevertheless, this is a downward revision from the last forecast and is the result of a substantial reduction in the forecast for office suite spending, reflecting the acceleration of Office 365 adoption. Office 365 is disrupting traditional revenue flows. Its cost is prorated over the life of the subscription, resulting in significantly lower revenue growth as users transition away from the on-premises model.

IT services spending will contract slightly to $942 billion in 2015, down from $948 billion in 2014. The largest reductions were made in implementation services, particularly in the U.S. Although the oil and gas industry is only 1 percent of the IT services market, oil and gas buyers historically react quickly when their prices drop, often cutting back on spending 20 percent or more. Because the U.S. is a large oil producer and a large market for IT services, the largest spending reductions on services is expected to take place in the U.S. through 2015 and 2016, with an early impact on implementation services.

 

Telecom

Growth in spending on telecom services is predicted to shrink by 2.6 percent in 2015, to total $1.57 trillion. Among the more prominent changes affecting multiple regions were reductions in total connections for developed markets such as the U.S. and several Western European nations, as growth in data-only connected devices and multi-SIM connections were not as high as previously expected.

 

 

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