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Gartner: Worldwide IT Spending To Rise 3.2% this Year

Gartner: Worldwide IT Spending To Rise 3.2% this Year
By Barry Levine

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"Businesses are shaking off their malaise and returning to spending on IT to support the growth of their business," said Richard Gordon, Gartner managing vice president. He added that increased IT spending on devices will show a "greater substitution toward lower-cost and more basic devices than we have seen in prior years."
 


Information technology spending will increase 3.2 percent worldwide this year to about $3.8 trillion, according to Gartner's new Worldwide IT Spending Forecast. The increase, part of a gradually improving economy, is being attributed to growth in enterprise software and device sales.

By contrast, IT spending last year increased only 0.4 percent over 2012. Enterprise software's increase in 2014 will be about 6.9 percent, itself driven by higher spending for databases, data management and social software. Devices such as PCs, ultramobiles, mobile phones and tablets will see a 4.4 percent increase in 2014 over last year.

The forecast points to growth in enterprise software for customer relationship management systems, database management systems, data integration tools and data quality tools. Gartner predicts that spending on database management systems will become the largest enterprise software market this year, exceeding the spending on operating systems.

Shaking Off Malaise

Richard Gordon, Gartner managing vice president, said in a statement that "businesses are shaking off their malaise and returning to spending on IT to support the growth of their business." He added that increased spending on devices will show a "greater substitution toward lower cost and more basic devices than we have seen in prior years."

In phones, for instance, Gartner is forecasting a preference in mature markets such as the U.S. and the UK for midtier premium phones, and in emerging countries for low-end Android basic phones. In PCs, customers are not replacing their computers as frequently as they have in the past, and the tendency on replacement is to move to a more mobile version, such as a laptop replacing a PC or an Ultrabook replacing a laptop.

Data center systems are expected to see a 2.3 percent increase over 2013, to $143 billion, with cloud and mobility needs being the biggest drivers. In particular, the research firm points to spending on data center Ethernet switches because of the adoption of virtualization and clouds, and on wireless LAN equipment because of a growth in mobile.

Upgrade Cycle

IT services will rise 4.6 percent to nearly a trillion dollars this year, with a shift from spending for project planning to project implementation. Telecom services spending is projected at a growth rate of 1.3 percent to $1.655 trillion. Trends affecting telecom include the continuing decline of fixed voice services and the increased use of voice-over-IP for private branch exchange connections to the Net.

Roger Kay, an analyst with Endpoint Technologies Associates, pointed out that "there's been a delay in the upgrade cycle" over the last few years. But, he noted, since the gap was fairly long since much IT hardware and software was replaced, it should be expected that the spending patterns will now be different.

Just as an example, he told us, "the cloud trend has people not buying certain kinds of hardware and software for their infrastructure."

Gartner said its forecast is based on an analysis of sales by thousands of vendors across the entire range of IT products and services.
 

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