IT spending to grow 4.5% in 2017 thanks to Cloud and mobile

SMB and IT
Market research agency IDC has revealed its IT spending forecast for 2017.

IT spending is expected to increase by 4.5 percent in 2017 in constant currency terms to $2.1 trillion – driven by stronger upgrade cycles for IT infrastructure and mobile devices.

Last year, IT spending rose 2.5 percent.

IT spending is forecast to increase by 4 percent in 2018.

Telecom services will increase by over 2 percent in constant currency terms this year.

IT spending including telecom services will reach $3.5 trillion in 2017.

IT spending in 2017

The strongest growth will come from infrastructure hardware, enterprise software, and mobile devices.

With cloud service providers expected to accelerate their datacenter investments in order to keep pace with growing demand for cloud services, total server spending will increase by 4 percent this year and 5 percent in 2018.

Enterprise spending on server and storage infrastructure will also pick up in the second half of 2017, driven by product refresh cycles. Demand for Infrastructure as a Service (IaaS) will remain robust, with spending set to exceed $25 billion this year and more than $50 billion by 2020.

Smartphone spending will increase by 7 percent this year to $439 billion, a big improvement on last year’s 1 percent growth.

“Cloud and mobile are still the big drivers for IT spending, despite the attention devoted to new technologies like augmented reality, artificial intelligence, and robotics,” said Stephen Minton, vice president, Customer Insights & Analysis at IDC.

Software spending will increase by 7 percent to more than $471 billion in constant currency, driven by enterprise investment in big data and analytics alongside ongoing adoption of Software-as-a-Service (SaaS) and other key growth segments.

IT services spending will post growth of 3 percent, led by project-oriented services. In telecom services, growth will still be driven by fixed and mobile data services while voice revenues continue to decline.

High-end servers are expected to post another year of double-digit decline this year, while hardcopy peripheral spending will fall for the second year in a row.

Tablet spending will also decline again, despite improving sales of hybrid and detachable models, while sales of traditional PCs and external storage systems will be broadly flat.

This year will also see slowing growth for enterprise network equipment and traditional outsourcing services.

China and India are both expected to post IT spending growth of 10 percent in constant currency terms this year. China is likely to see a moderating pace of growth in the next few years as the economy begins to slow.

Gartner report on IT spending

Global IT spending is projected to reach $3.5 trillion in 2017 — a 2.4 percent increase from 2016, market research firm Gartner said on Thursday.

Global spending on devices which include PCs, tablets and mobile phones is projected to grow 3.8 percent in 2017 to reach $654 billion — an increase of 1.7 percent from previous quarter’s forecast.
Gartner report on IT spending for 2017 and 2018The mobile phone growth will be driven by increased average selling prices (ASPs) for premium phones in mature markets due to the 10th anniversary of the iPhone while the tablet market may continue to decline.

“Digital business is having a profound effect on the way business is done and how it is supported,” said John-David Lovelock, vice president, Gartner, in a statement.

The growth rate is up from the previous quarter’s forecast of 1.4 percent owing to decline of the US dollar against many foreign currencies.

According to Gartner, the worldwide enterprise software market is forecast to grow 7.6 percent in 2017.

As software applications allow more organisations to derive revenue from digital business channels, there will be a stronger need to automate and release new applications and functionality.

“The Cloud-based tools allow infrastructure and operations (I&O) organisations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles,” Lovelock noted.