GEC NEWS WIREGartner says worldwide IT spending to decline 5.5 percent in 2015; Analysts attribute the decline to the rising U.S. dollar
Worldwide IT spending is on pace to total $3.5 trillion in 2015, a 5.5 percent decline from 2014, according to the latest forecast by Gartner. In constant-currency terms, the market is projected to grow 2.5 percent. In Gartner’s previous forecast in April, it had forecast IT spending to decline 1.3 percent in U.S. dollars and grow 3.1 percent 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 U.S. dollar versus other currencies can create,” said John-David Lovelock, research vice president at Gartner. “However, there are secondary effects to the rising U.S. 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. In the device market, mobile phones continue to be the leading segment however, overall smartphone unit growth will start to flatten. The PC and tablet markets continue to weaken. The expected 10 percent increase in average PC pricing in currency-impacted countries is going ahead, delaying purchases even more than expected.
Within the data center systems segment, storage and network markets are both expected to see weaker growth in U.S. dollar terms as a result of the appreciation of the U.S. dollar. Enterprise software spending is forecast to decline 1.2 percent in 2015, with revenue totaling $654 billion. Gartner analysts said many software vendors will try not to raise prices because software as a service (SaaS) 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 percent. However, the forecast for implementation services has been slightly reduced. Increasingly, buyers prefer solutions that minimize time and cost of implementation, driving demand for more-efficient delivery methods, out-of-the-box implementation, and lower-cost solutions.
“IT activity is stronger than the growth in spending indicates. Price declines in major markets like communications and IT services, and switching to ‘as a service’ delivery, mask the increase in activity,” Mr. Lovelock said.
