Analysts to Discuss Latest IT Spending Outlook During Gartner
Webinar on July 14
Worldwide IT spending is on pace to total $3.5 trillion in 2015, a 5.5
percent decline from 2014, according to the latest forecast by Gartner,
Inc. Analysts attribute the decline to the rising U.S. dollar. In
constant-currency terms, the market is projected to grow 2.5 percent. In
Gartner's previous forecast in April, it had forecast IT spending to
decline 1.3 percent in U.S. dollars and grow 3.1 percent in constant
currency.
"We want to stress that this is not a market crash. Such are the
illusions that large swings in the value of the U.S. dollar versus other
currencies can create," said John-David
Lovelock, research vice president at Gartner. "However, there are
secondary effects to the rising U.S. dollar. Vendors do have to raise
prices to protect costs and margins of their products, and enterprises
and consumers will have to make new purchase decisions in light of the
new prices."
The Gartner
Worldwide IT Spending Forecast is the leading indicator of major
technology trends across the hardware, software, IT services and telecom
markets. For more than a decade, global IT and business executives have
been using these highly anticipated quarterly reports to recognize
market opportunities and challenges, and base their critical business
decisions on proven methodologies rather than guesswork.
Communications services will continue to be the largest IT spending
segment in 2015 with spending at nearly $1.5 trillion (see Table 1).
However, this segment is also experiencing the strongest decline among
the five IT sectors. Price erosion and competitive threats are
preventing revenue growth in proportion to increasing use within most
national markets.
Table 1. Worldwide IT Spending Forecast by Sector (Billions of U.S.
Dollars)
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2014
Spending
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2014
Growth (%)
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2015
Spending
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2015
Growth (%)
|
|
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Devices
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|
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693
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|
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2.4
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|
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654
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-5.7
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Data Center Systems
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|
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142
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1.8
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|
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136
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-3.8
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|
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Enterprise Software
|
|
|
314
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|
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5.7
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|
|
310
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|
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-1.2
|
|
|
IT Services
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|
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955
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|
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1.9
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|
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914
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|
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-4.3
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|
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Communications Services
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1,607
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0.2
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1,492
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-7.2
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Overall IT
|
|
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3,711
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|
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1.6
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|
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3,507
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-5.5
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Source: Gartner (June 2015)
In the device market, mobile phones continue to be the leading segment,
with growth in Apple phones, especially in China, keeping overall phone
spending consistent. However, overall smartphone unit growth will start
to flatten. The PC and tablet market continues to weaken. The expected
10 percent increase in average PC pricing in currency-impacted countries
is going ahead, delaying purchases even more than expected. Excessive PC
inventory levels, especially in Western Europe, need to be cleared,
which will delay Windows 10 inventory in the second half of the year.
Within the data center systems segment, storage and network markets are
both expected to see weaker growth in U.S. dollar terms as a result of
the appreciation of the U.S. dollar. Enterprise budgets for data center
systems in local spending are expected to remain stable for the year,
with users expected to extend life cycles and defer replacements as a
means of offsetting the price increases. The overall near-term data
center weakness is slightly offset by a more positive outlook for the
server market. The server market is benefiting from a
stronger-than-expected mainframe refresh cycle, as well as increased
expectations for hyperscale spending.
Enterprise software spending is forecast to decline 1.2 percent in 2015,
with revenue totaling $654 billion. Gartner analysts said many software
vendors will try not to raise prices because software as a service
(SaaS) is about market share, not profitability. Raising prices could
take software vendors out of a sales cycle, and these vendors don't
believe they can afford to lose a client.
IT services spending in 2015 is projected to decline 4.3 percent.
Gartner expects modest increased spending on consulting in 2015 and
2016, as vendors have demonstrated their ability to stimulate new demand
from buyers looking for help with navigating business and technology
complexities, particularly related to building a digital business.
However, the forecast for implementation services has been slightly
reduced. Increasingly, buyers prefer solutions that minimize time and
cost of implementation, driving demand for more-efficient delivery
methods, out-of-the-box implementation, and lower-cost solutions.
"IT activity is stronger than the growth in spending indicates. Price
declines in major markets like communications and IT services, and
switching to 'as a service' delivery, mask the increase in activity,"
Mr. Lovelock said.
More-detailed analysis on the outlook for the IT industry will be
presented in the webinar "IT
Spending Forecast, 2Q15 Update: Why Is Global IT Spending Shrinking?"
The complimentary webinar will be hosted by Gartner on July 14 at 11
a.m. EST. During the webinar, Gartner analysts will discuss where global
IT spending is headed from 2015 through 2019. Analysts will also look at
how foreign countries' spending is being changed by the rising U.S.
dollar. They will also look at where product prices have increased, and
who will spend more and who will spend less. For more information,
please visit http://www.gartner.com/webinar/2939722.
Gartner's IT spending forecast methodology relies heavily on rigorous
analysis of sales by thousands of vendors across the entire range of IT
products and services. Gartner uses primary research techniques,
complemented by secondary research sources, to build a comprehensive
database of market size data upon which to base its forecast. The
Gartner quarterly IT spending forecast delivers a unique perspective on
IT spending across hardware, software, IT services and communications
services segments. These reports help Gartner clients understand market
opportunities and challenges. The most recent IT spending forecast
research is available at http://www.gartner.com/technology/research/it-spending-forecast/.
This quarterly IT spending forecast page includes links to the latest IT
spending reports, webinars, blog posts and press releases.
About Gartner
Gartner, Inc. (NYSE:IT) is the world's leading information technology
research and advisory company. The company delivers the
technology-related insight necessary for its clients to make the right
decisions, every day. From CIOs and senior IT leaders in corporations
and government agencies, to business leaders in high-tech and telecom
enterprises and professional services firms, to technology investors,
Gartner is the valuable partner to clients in approximately 10,000
distinct enterprises worldwide. Through the resources of Gartner
Research, Gartner Executive Programs, Gartner Consulting and Gartner
Events, Gartner works with every client to research, analyze and
interpret the business of IT within the context of their individual
role. Founded in 1979, Gartner is headquartered in Stamford,
Connecticut, USA, and has 6,800 associates, including more than 1,500
research analysts and consultants, and clients in 90 countries. For more
information, visit www.gartner.com.
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