Rising dollar to pull global IT spending down 5.5% to $3.5t in 2015
Dubai - In Gartner's previous forecast in April, it had forecast IT spending to dip 1.3 per cent in dollars and grow 3.1 per cent in constant currency.
Published: Tue 21 Jul 2015, 7:58 PM
Worldwide IT spending is on pace to total $3.5 trillion in 2015, a 5.5 per cent decline from 2014, according to the latest forecast by Gartner, with analysts attribute the fall to the rising US dollar.
In constant-currency terms, the market is projected to grow 2.5 per cent. In Gartner's previous forecast in April, it had forecast IT spending to dip 1.3 per cent in dollars and grow 3.1 per cent in constant currency.
"We want to stress that this is not a market crash. Such are the illusions that large swings in the value of the US dollar versus other currencies can create," said John-David Lovelock, research vice0president at Gartner. "However, there are secondary effects to the rising US dollar. Vendors have to raise prices to protect costs and margins of their products, and enterprises and consumers will have to make new purchase decisions in light of the new prices."
Communications services will continue to be the largest IT spending segment in 2015 with spending at nearly $1.5 trillion. However, this segment is also experiencing the strongest decline among the five IT sectors. Price erosion and competitive threats are preventing revenue growth in proportion to increasing use within most national markets. In the device market, mobile phones continue to be the leading segment, with growth in Apple phones, especially in China, keeping overall phone spending consistent. However, overall smartphone unit growth will start to flatten.
The PC and tablet markets continue to weaken. The expected 10 per cent increase in average PC pricing in currency-impacted countries is going ahead, delaying purchases even more than expected. Excessive PC inventory levels, especially in Western Europe, need to be cleared, which will delay Windows 10 inventory in the second half of the year.
Within the data centre systems segment, storage and network markets are both expected to see weaker growth in US dollar terms as a result of the appreciation of the dollar. Enterprise budgets for data centre systems in local spending are expected to remain stable for the year, with users expected to extend life cycles and defer replacements as a means of offsetting the price increases. The overall near-term data centre weakness is slightly offset by a more positive outlook for the server market. The server market is benefiting from a stronger-than-expected mainframe refresh cycle, as well as increased expectations for hyperscale spending.
Enterprise software spending is forecast to decline 1.2 per cent in 2015, with revenue totalling $654 billion. Gartner analysts said many software vendors will try not to raise prices because software-as-a-service is about market share, not profitability. Raising prices could take software vendors out of a sales cycle, and these vendors don't believe they can afford to lose a client.
IT services spending in 2015 is projected to decline 4.3 per cent. Gartner expects modest increased spending on consulting in 2015 and 2016.
- business@khaleejtimes.com
iPhone | iPad
Android
Huawei
