TRENDING
support runaway IT budgets is forcing
more organisations to optimise as a first
step. Business processes, as well as IT,
are undergoing optimisation — digital
business requires both. However, many
CIOs are reluctant to raise this possibility,
given the cultural and political barriers to
optimising business costs.”
The most evident results of these
optimization efforts are in the switches
in spending between assets and services.
“Most traditional IT now has a ‘digital
service twin’ — license software has
cloud software, servers have Infrastructure
as a Service, and cellular voice has VoLTE,”
Mr. Lovelock said. “Things that once had
to be purchased as an asset can now be
delivered as a service. Most digital service
twin offerings change the spending
pattern from a large upfront payment to
a smaller reoccurring monthly amount.
This means that the same level of activity
has a very different annual spend.”
The Gartner Worldwide IT Spending
Forecast is the leading indicator of major
technology trends across the hardware,
software, IT services and telecom markets.
For more than a decade, global IT and
business executives have been using
these highly anticipated quarterly reports
to market opportunities and challenges,
and base their critical business decisions
on proven methodologies rather than
guesswork.
The device market (PCs, ultramobiles,
mobile phones, tablets and printers) is
forecast to decline 3.7 percent in 2016.
The smartphone market is approaching
global saturation, slowing growth. The
PC and ultramobile markets are expected
DATA CENTRE
SYSTEMS’ SPENDING IS
PROJECTED TO REACH
$175 BILLION IN 2016, A
2.1% INCREASE FROM
2015. THIS TOP-LEVEL
RELATIVE STABILITY
MASKS SOME CHANGES
WITHIN THE SEGMENTS;
ENTERPRISE NETWORK
EQUIPMENT HAD A
STRONGER-THANANTICIPATED 2015 AS
A RESULT OF NETWORK
UPGRADES
to decline. The underlying reasons are a
combination of factors and are geographyspecific, and the worsening economic
conditions in many countries only serve to
amplify the impact of these factors.
Data centre systems’ spending is projected
to reach $175 billion in 2016, a 2.1%
increase from 2015. This top-level relative
stability masks some changes within the
segments; enterprise network equipment
had a stronger-than-anticipated 2015
as a result of network upgrades, and
this is expected to carry on into 2016.
The external-controller-based storage
segment continues to suffer from ongoing
challenges. In the server segment, demand
from hyper scale buyers is expected to
reduce in 2016, particularly in regions that
are suffering from economic challenges,
such as Eurasia. The mainframe refresh,
Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)
18
2015 spending
2015 Y/Y
2016 spending
2016 Y/Y
Devices
650
(6.4%)
626
(3.7%)
Data Centre Systems
171
2.9%
175
2.1%
Software
308
(1.9%)
321
4.2%
IT Services
910
(4.7%)
929
2.1%
Communication Services
1,470
(8.4%)
1,441
(2%)
Overall IT
3,509
(6%)
3,492
(0.5%)
INTELLIGENTCIO
which benefited the market in 2015, is
expected to abate in 2016, also inhibiting
the overall growth figures.
Global enterprise software spending is
on pace to total $321 billion, a 4.2%
increase from 2015. The operating
system forecast has been downgraded,
reflecting Gartner’s expectation for further
delays in the adoption of Windows 10
and Windows Server 2016. However, it
is the key emerging markets, particularly
Latin America, which face escalating
political and economic challenges that
are responsible for the slow growth.
Organisations in those regions must
balance cost cutting with growth
opportunities during times of economic
concern.
Spending in the IT services market is
expected to return to growth in 2016,
totalling $929 billion, up 2.1% from 2015.
A stronger outlook for Japan and India
is nearly balanced by a weaker outlook
in Brazil, China and South Korea, based
on challenging economic and political
conditions in Brazil; and government
actions and weakening economic
conditions in China and South Korea.
Telecom service spending is projected
to decline 2.0 percent in 2016, with
spending reaching $1.4 trillion. Continuing
economic downturns in major markets
such as Russia and Brazil are dampening
spending in both fixed and mobile voice,
and a slight slowdown in China’s growth
is affecting consumer confidence and
eroding spend in fixed voice services. In
enterprise services, conditions in these
same three major markets are leading to
consolidation among businesses (reducing
connections and spend), however, mobile
data spending is a bright spot with
accelerating growth driven by improved
pricing on bandwidth, mobile app and 4G/
LTE network availability.
More-detailed analysis on the outlook for
the IT industry will be presented in the
complimentary webinar “IT Spending
Forecast, 1Q16 Update: Where Is All the
Money Going?” taking place April 12 at
11 a.m. EDT. During the webinar, Gartner
analysts will discuss global IT spending
from 2016 through 2019 and why the
pace of IT spending is not keeping up with
the pace of change.
www.intelligentcio.com