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Worldwide IT spending to grow 1.4 percent in 2017: Gartner

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IT spending in 2017

Worldwide IT spending is projected to hit $3.5 trillion in 2017 — a 1.4 percent increase from 2016, according to market research firm Gartner. The reported growth rate is down from the previous quarter’s forecast of 2.7 percent.

Gartner considers that the declined growth rate is due in part to the rising US dollar. “The strong US dollar has cut $67 billion out of our 2017 IT spending forecast,” said John-David Lovelock, research vice president at Gartner, in a statement.

“We expect that these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017,” Lovelock added.

Growth of data centres

In the entire list of worldwide IT spending, the data centre system segment is predicted to grow 0.3 percent in 2017. This certainly suggests some positivity after the negative growth last year. However, the segment is overall experiencing a slowdown due to decline sales of servers with the arrival of new cloud computing models.

“Enterprises are moving away from buying a server from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data centre system segment,” Lovelock highlighted.

IT services to grow with ‘potential changes’ in US policy

Apart from the data centre segment, the global IT services market is forecast to grow 2.3 percent in 2017 — down from 2.6 percent growth last year. Gartner believes that the “modest changes” to the prediction related to IT services in the first quarter can be a result of “potential changes of direction anticipated regarding the US policy”.

Further, devices segment in the entire IT spending is projected to reach $645 billion — a 1.7 percent increase from 2016. Strength in mobile phone sales and smaller improvements in the sales of printers, desktops and tablets are considered to be the prime reasons behind the growth.