Monday, July 29th, 2013 | Internet

Gartner Downgrades 2013 IT Spending Forecast to $3.7 Trillion

GartnerThe American research firm, Gartner, has announced that global information technology (IT) spending will reach $3.7 trillion by the end of 2013, some two percent more than last year’s figure of $3.6 trillion.

The announcement came as a surprise to many as the new projection is slightly lower than the 4.1 percent growth that Gartner had estimated just three months ago.

A report issued by the Connecticut-based firm suggests that the reduction is due mainly to recent fluctuations in US dollar exchange rates.  Growth in constant currency is forecast at 3.5 percent for 2013, down slightly from last quarter.

“Exchange rate movements, and a reduction in our 2013 forecast for devices, account for the bulk of our downward revision of the 2013 growth,” said Richard Gordon, Gartner’s managing vice president “Regionally, 2013 constant-currency spending growth in most regions has been lowered.”

Slow PC sales seen for the rest of the year

The same is not true in parts of Europe, where constant-currency spending on IT products and services is expected to see a slightly more robust expansion.  “Western Europe’s constant-currency spending has been inched up slightly as strategic IT initiatives will continue despite a poor economic outlook,” Gordon explained.

Industry observers suggest that weaker than expected PC sales also played a role in Gartner’s downgrade of its forecast.

The firm had previously predicted a 7.9 percent increase in expenditures for devices in 2013.  Analysts at the firm have now lowered that estimate to 2.8 percent due to a continued decline in PC sales.

The huge decrease in PC sales during the first three months of this year dragged on into the second quarter.  Gartner now expects little recovery for the PC industry throughout the rest of the year.

“While new devices are set to hit the market in the second half of 2013, they will fail to compensate for the underlying weakness of the traditional PC market,” Gartner said in its report.

 

Telecom spending to rebound, enterprise software to stay strong

Meanwhile, tablet sales are expected to grow by some 38.9 percent and mobile phones by 9.3 percent.  Overall spending for devices will amount to some $695 billion this year, up from $676 billion in 2012, according to the report.

Gartner expects device spending to gain more sizeable ground next year as the firm predicts a 6.5 percent increase in expenditures for devices in 2014.  Revenues are expected to amount to some $740 billion.

The firm believes spending on data center systems will rise 2.1 percent this year to $143 billion.  At the same time, revenues from IT services will increase by some 2.2 percent to $926 billion.

The largest segment in the Gartner survey is for telecom spending, which the firm sees rebounding from the decline it experienced last year.  “Fixed broadband is showing slightly higher than anticipated growth,” Gartner said. “The impact of voice substitution is mixed as it is moving faster in the consumer section, but slightly slower in the enterprise market.”

Spending for telecom services — which include business phone systems and other communications services — is expected to see a 0.9 percent expansion in 2013.  Gartner says expenditures for these services will increase from $1.64 trillion in 2012 to $1.65 trillion this year.

But enterprise software is expected to show the most strength.  Revenues from this segment are expected to expand by some 6.4 percent this year to $304 billion.

“Growth expectations for customer relationship management (CRM) have been raised to reflect e-commerce, social and mobile,” according to the Gartner report.  “Expectations for digital content creation and operating systems have been reduced as software as a service (SaaS) and changing device demands impact traditional models and markets.”

About

Monique Jones juggles being a wife to an Engineer and a mom to a witty kid. In her spare time, she entails herself in getting the word out about the RingCentral business voip. Find her on Google+.


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