IT spending to drop this year, reveals Gartner

Worldwide IT Spending Forecast for 2016
Gartner shared less impressive news for the IT industry.

Gartner says IT spending will dip 0.5 percent to $3.49 trillion in 2016 — mainly due to currency fluctuations – from $3.5 trillion in 2015.

Earlier, Gartner said the IT spending will grow 0.5 percent.

“The need to invest in IT to support digital business is urgent. Leaders know that they need to become digital businesses or face irrelevance in a digital world. Enterprises are engaging in cost optimization efforts in some areas to fund digital business in others,” said John-David Lovelock, research vice president at Gartner.

“Typically, less than 10 percent of organizations are in cost optimization or cost cutting mode. However, the need to spend on digital business initiatives in a time when revenue growth does not support runaway IT budgets is forcing more organizations to optimize as a first step,” said Lovelock.

The Gartner report said that business processes, as well as IT, are undergoing optimization — digital business requires both. However, many CIOs are reluctant to raise this possibility, given the cultural and political barriers to optimizing business costs.

The device market is forecast to decline 3.7 percent in 2016.

Data center systems’ spending is projected to increase 2.1 percent to $175 billion in 2016.

Enterprise software spending will increase 4.2 percent to $321 billion.

Spending in the IT services market is expected to increase 2.1 percent to 2016 to $929 billion.

Telecom service spending is projected to decline 2 percent in 2016 to $1.4 trillion.

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