Skip to main content

Enterprise IT Investment is Driven by C-Level Strategy

In the evolving global networked economy, every type of company essentially becomes a technology-oriented firm -- in one form or another. That's fueling the strategic investment in IT infrastructure and services. Currency market changes are another key factor.

As a result, worldwide IT spending is projected to total $3.7 trillion in 2018 -- that's an increase of 6.2 percent from 2017, according to the latest market study by Gartner. Senior executives and line of business leaders continue to drive many of the strategic IT procurement decisions.

IT Infrastructure Market Development

"Although global IT spending is forecast to grow 6.2 percent this year, the declining U.S. dollar has caused currency tailwinds, which are the main reason for this strong growth," said John-David Lovelock, vice president at Gartner.

This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth. However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth.

Through 2018 and 2019, the U.S. dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for an innovation trade-war with China.

Enterprise software spending is forecast to experience the highest growth in 2018 with an 11.1 percent increase. The software industry is expected to capitalize on the evolution of digital business. Application software spending will continue to rise through 2019, and infrastructure software will also continue to grow -- bolstered by IT modernization initiatives.

Even with a strong end to 2017, worldwide spending on traditional data center systems is forecast to grow 3.7 percent in 2018 -- but that's down from 6.3 percent growth in 2017. The longer-term outlook continues to have challenges, particularly for the data storage segment. Blame lies in the advance of public cloud computing adoption.

The strength at the end of 2017 was primarily driven by the component shortage for semiconductor memory, and prices have increased at a greater rate than previously expected. According to the Gartner assessment, the shortages will likely continue throughout the year with the supply not expected to ease until the end of the year.

Outlook for End-User Device Investment

Worldwide spending for devices -- i.e. personal computers, media tablets and smartphones -- is forecast to grow in 2018, reaching $706 billion, an increase of 6.6 percent from 2017. The device market continues to see dual dynamics. Some users are holding back from buying, and those that are buying are doing so, on average, at higher price points.

As a result, end-user spending will increase faster than units through 2022. However, total end-user spending and unit shipments are expected to be lower compared with previous forecasts, as demand for ultra-mobile premium devices, ultra-mobile utility devices and basic mobile phones is expected to be slow.

Popular posts from this blog

The $4 Billion Opportunity for Satellite IoT

In an era where wireless connectivity is pervasive, Satellite Internet of Things (IoT) can change industries, offering leaders unprecedented opportunities to drive efficiency and innovation. As industries across the globe seek to enhance operational efficiency and sustainability, satellite IoT emerges as a pivotal enabler. According to a worldwide study by ABI Research, the Satellite IoT market is forecast to reach $4 billion by 2030, with over 26 million connections anticipated. "Prominent satellite IoT providers such as Inmarsat, ORBCOMM, Globalstar, Myriota, and hiSky have been actively working together with their partners to expand their service offerings and enhance connectivity solutions," said Jake Saunders, vice president at ABI Research . Satellite IoT Market Development The satellite IoT market's expansion is largely fueled by its application across key verticals, including agriculture, energy and utilities, fisheries and aquaculture, and environmental monitorin