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January 13, 2014

Global IT Spending to Grow by 3.1 Percent in 2014

While information and communication technology (ICT) is growing at different rates around the world, the global IT expenditure will only go up slightly in 2014. According to Gartner (News - Alert) the growth will be driven by enterprise software spending bringing the total to only 3.1 percent between 2013 and 2014. Although the 3.1 percent is relatively low, it is much higher than the 0.4 percent of the previous year, bringing the total for IT and telecom spending to $3.8 trillion.

There are many factors in trying to assess markets around the world, and while many different sets of data can provide a guide for predicting what will take place in the coming year, the process is not always accurate.

The prediction Gartner made for 2013 was short by 3.8 percent from the 4.2 percent it had forecasted for the year. Although forecasting the exact growth of any industry is not an exact science, evaluating the data Gartner provides can give players in the industry valuable information of existing trends for making informed decisions.

The numbers Gartner came up with for 2014 is the same as IDC which said there would be a growth of five percent year over year to $2.1 trillion in 2014, while Forrester (News - Alert) Research said it expects a 6.2 percent increase to $2.2 trillion. Both of these forecasts don't include telecom spending as Gartner does.

According to Gartner the telecom sector will grow to just 1.2 percent with $1.7 trillion in spending. The slow growth in the telecom sector is based on the contraction of spending on PCs, mobile phones and tablets.

Once again the PC market will see lower numbers as mobile devices continue to capture market shares, but the growth of IT spending in emerging markets will continue to grow increasing by double digit rates, accounting for a little more than a third of total global IT expenditure.

The impact of cloud computing is still being felt across many different industries and the future of 2nd platform era IT suppliers is very much in question as they reconfigure themselves in order to compete with 3rd platform organization. From infrastructure as a service (IaaS) to platform as a service (PaaS) companies like Amazon Web Services (AWS) are poised to take advantage of the future of IT.

While companies such as Cisco, IBM, HP, Oracle (News - Alert) and others are having a harder time selling their hardware, new players are entering the market to compete against the clear leader in the market, AWS. Data centers, mobile, big data, social technology and 3rd platform are intertwined together, and companies that are able to deliver these next generation of competitive product and services to their customer will forge ahead in an environment full of disruptive technology in virtually every market.

Edited by Cassandra Tucker

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