Technology | Media | Telecommunications

Monday, July 17, 2017

Worldwide IT Spending will Reach $2.1 Trillion in 2017

As more enterprise CIOs and CTOs increase their planned investment in digital business transformation projects, vendors will witness improved demand in 2017. Worldwide IT spending is forecast to increase by 4.5 percent in constant currency terms -- that's a significant improvement over 2016 growth of 2.5 percent, according to the latest market study by International Data Corporation (IDC).

Total IT spending this year will reach $2.1 trillion. It's forecast to increase by another 4 percent in 2018. Including telecom services, which will increase by just over 2 percent in constant currency terms this year, the overall information and communications technology (ICT) market is anticipated to reach $3.5 trillion.

IT Infrastructure Market Development

According to the IDC assessment, the most growth in 2017 will originate from infrastructure hardware, enterprise software, and mobile devices. Public cloud service providers will accelerate their data center investments. Total server spending will increase by 4 percent this year, and 5 percent in 2018.

Enterprise spending on server and storage infrastructure will also increase during the second half of 2017, driven in part by vendor product refresh cycles.

Meanwhile, demand for Infrastructure as a Service (IaaS) will remain robust, with spending set to exceed $25 billion this year and rising to more than $50 billion by 2020.

Last year saw a significant slowdown in the mobile smartphone market, with price competition affecting many markets. Stronger growth is expected in the second half of 2017, as vendors launch significant new products, while penetration grows in key emerging markets, such as China.


That being said, overall smartphone spending is anticipated to increase by 7 percent this year, reaching as much as $439 billion -- again, that's a significant improvement on the 1 percent growth in 2016.

"Cloud and mobile are still the big drivers for IT spending, despite the attention devoted to new technologies like augmented reality, artificial intelligence, and robotics," said Stephen Minton, vice president at IDC.

The IDC analysts say that new technologies will drive a larger share of market growth in the next 5-10 years, but the short term will also see a resurgence of growth in markets tied to cloud services, mobility, and big data.

Software spending will increase by 7 percent in 2017 to reach more than $471 billion in constant currency, driven by continued enterprise investment in big data and analytics alongside ongoing adoption of Software-as-a-Service (SaaS) and other key growth segments.

Meanwhile, IT services spending will post growth of 3 percent this year, led by project-oriented services. In the telecommunication sector, growth will still be driven by fixed and mobile data services, while voice revenues will likely continue to decline.

Outlook for ICT Growth Opportunities

"While overall market momentum is set to improve, some technologies will continue to drag on industry growth in the near term," said Minton.

IDC analysts believe that high-end servers are expected to post another year of double-digit declines, while hard-copy peripheral spending will fall for the second year in a row.

Furthermore, overall media tablet spending will also decline once again, despite improving sales of hybrid and detachable models, while sales of traditional PCs and external storage systems will be flat.

This year will also see slowing growth for enterprise networking equipment and traditional outsourcing services. For vendors still relying on legacy technologies for their revenue and growth, IDC predicts that the market will remain very challenging.