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Global IT spending will reach $3.5 trillion in 2017, Gartner says

Global IT spending will reach $3.5 trillion in 2017, Gartner says

IT and business service spending to cross $1 trillion in 2018: IDC (10 November 2016 10:34)
OPEC: Global energy demand to increase by 40 pct by 2040 (09 November 2016 12:46)

Date: 20 October 2016 12:34

Driven by growth in software and IT services revenue, worldwide IT spending is forecast to reach $3.5 trillion in 2017, up 2.9% from 2016 estimated spending of $3.4 trillion, according to the latest forecast by Gartner.
 
The bright spot for the IT industry has been the software and IT services segments. Software spending is projected to grow 6% in 2016, and it will grow another 7.2% in 2017 to total $357 billion. IT services spending is on pace to grow 3.9% in 2016 to reach $597 billion and increase 4.8% in 2017 to reach $943 billion.
 
"The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016," said John-David Lovelock, a research vice-president at Gartner.
 
"Without the UK, global IT spending growth would have been modestly positive at 0.2 % in 2016, but with the UK included, IT spending is expected to decrease 0.3%. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase."
 
Companies will be monitoring negotiations closely, and there will be some changes in IT investment. For example, in financial services, analysts expect to see some countries in Europe put more investment in IT to offer a more viable option for EU countries than the UK.
 
"We see software and IT services spending in Germany and France increasing, while the UK services stay relatively flat," Lovelock said.
 
"There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the UK. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the UK."
 
With the US presidential election three weeks away, Gartner analysts do not believe the pending election, or the winning candidate, will affect IT spending trends.
 
"We have also taken into account the US presidential race, as well as a potential rate cut by the Federal Reserve. Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently. However, trends have shown that IT spending in the US is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term," said Gartner.



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