IT Services

IT spending to hit $3.8 trillion in 2014

Staff Writer

 ·13 Apr 2014

With the global economy showing signs of a gradual recovery, worldwide IT spending is on pace to total $3.8 trillion in 2014, according to the latest forecast by Gartner.

This equates to a 3.2% increase from 2013 spending, the firm noted.

“Globally, businesses are shaking off their malaise and returning to spending on IT to support the growth of their business,” said Richard Gordon, managing vice president at Gartner.

“Consumers will be purchasing many new devices in 2014; however, there is a greater substitution toward lower cost and more basic devices than we have seen in prior years.”

• The devices market (including PCs, ultramobiles, mobile phones and tablets) is forecast to return to growth in 2014, with worldwide spending of $689 billion, a 4.4 per cent increase from 2013.

However, in top-line spending, a shift in the product mix continues to be seen in the marketplace.

“Demand for highly priced premium phones is slowing, with buyers in mature countries preferring mid-tier premium phones, while those in emerging countries favor low-end Android basic phones,” Gartner said.

In general, consumers are opting to buy premium ultramobiles as notebook replacements and purchasing tablets as additional devices.

“As market power shifts to the buyer, and key product innovations become ubiquitous, product pricing is becoming the primary differentiator.”

• Data centre systems spending is projected to reach $143 billion in 2014, a 2.3 per cent increase from 2013.

In terms of enterprise network equipment trends, cloud and mobility are the biggest demand drivers.

Virtualisation and cloud adoption are generating significant market traction for data centre Ethernet switches, and the proliferation of mobile endpoints is continuing to drive significant demand for the wireless LAN equipment market.

• In the enterprise software market, spending is on pace to total $320 billion, a 6.9 per cent increase from 2013.

The enterprise software market is the fastest-growing segment in 2014.

“The Nexus of Forces (the convergence of social, mobile, cloud and information) continues to drive growth across key major software markets, such as customer relationship management, database management systems (DBMSs), data integration tools and data quality tools,” Gordon said.

“In fact, organisational adoption of data management technologies to support the Nexus will cause spending on DBMSs to surpass operating systems, making the former the largest enterprise software market in 2014.”

• IT services is forecast to total $964 billion in 2014, up 4.6 per cent from 2013.

IT services buyers are shifting spending from consulting (planning projects) to implementation (doing projects), and Gartner analysts expect steady growth in the IT services market as the economic outlook, and along with it investment sentiment, improves.

• Telecom services spending is projected to grow 1.3 per cent in 2014, with spending reaching $1.655 trillion.

Fixed voice services continue to decline from substitution effects occurring a bit faster than previously anticipated, affecting the balance of wireless-only households in important markets, such as Japan, as well as the migration of enterprise lines due to Session Initiation Protocol (SIP) trunking (the use of voice over IP (VoIP) to facilitate the connection of a private branch exchange (PBX) to the Internet).

Global IT spending (US$ billions)

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