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IT Spending Shows A Flat Growth Of $3.41 Trillion In 2016: Gartner

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IT Spending Shows A Flat Growth Of $3.41 Trillion In 2016: Gartner

According to a recent release by Gartner, the worldwide IT spending will take it to a total of $3.41 trillion in 2016, signifying a flat growth from the last quarter’s forecast of -0.5% growth.

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The spending on data center systems is expected to reach $174 billion in 2016, marking a 2% increase from 2015. The growing markets in Greater China and Western Europe coupled with the refresh cycle in the North American enterprise network equipment market are the major drivers of data center systems growth.

The global enterprise software spending will reach $332 billion, a 5.8% increase from 2015. In the enterprise software, North America leads and is responsible for $11.6 billion of the $24 billion dollar increase in 2016.

The devices spending is projected to total $627 billion by the end of 2016. The economic issues in Russia, Japan, and Brazil will hinder the demand in 2016, Gartner predicted. Windows 10 upgrades is a reason cited for slow spending as the consumers are willing to use older PCs longer, once they are upgraded to Windows 10.

Another spending targeted to increase is the IT services market, which is expected to increase 3.7%, totaling $898 billion. Japan leads the sector with 8.9% growth.

Communications services spending is estimated to go down up to 1.4% from 2015. It is projected to total $1.38 trillion in 2016. The major reasons cited for this downgrade are the price wars and declining usage, affecting all communications services markets. Among the top countries leading in communications services market, Japan shows a growth with 8.3% and Greater China added the most dollars to spend with $8.3 billion.

“The current Gartner Worldwide IT Spending Forecast assumes that the U.K. would not exit the European Union. With the U.K.’s exit, there will likely be an erosion in business confidence and price increases which will impact U.K., Western Europe, and worldwide IT spending,” said John-David Lovelock, research vice president at Gartner.

“2016 is the year that business focus turns to digital business, the Internet of Things and even algorithmic business. To fund these new initiatives, many businesses are turning to cost optimization efforts centering around the new digital alternatives (for example, SaaS instead of software licenses, voice over LTE [VoLTE] instead of cellular and digital personal assistants instead of people) to save money, simplify operations and speed time to value. It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent,” he added.

For the analysis, Gartner has relied on thousands of vendors across IT products and services. The data, which will be presented in more detail in a webinar “IT Spending Forecast, 2Q16 Update: New Options Are Disrupting Established Markets” taking place on July 12 at 11 a.m. EDT, delivers a detailed perspective on IT spending across hardware, software, IT services and telecommunications segments.

Ria Lakshman. V is a lead news writer at The Telecom Times. She studied Journalism at Manipal School of Communication and proceeded to work in newspapers and magazines, with technology as her focus area. Passionate about Telecommunications sector, her move to 'The Telecom Times' was a natural choice. Alongside, she also writes for Telecom Talk, where she covers news and tech commentaries in the sector of telecom. In the free time, Ria loves to go camping, read books, or sketch illustrations. She also runs a local design studio and promotes eco-friendly crafts. Ria can be found sharing her knowledge and insights on Twitter.

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