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May 20, 2014

Report: IT Spending Slowing in 2014

A new report by industry insider International Data Corporation (IDC (News - Alert)) revealed worldwide spending on Information Technology (IT) is expected to increase once again. One interesting aspect of this report is that IDC does not believe the increase is quite as much as the firm anticipated. IDC says spending will increase by 4.1 percent, which is down a tick from its estimates of a 4.6 percent increase.

Even more interesting is that if IDC is correct in its estimates, the growth rate is also down slightly from last year’s 4.5 percent. The slowing up of spending in the IT market has a number of different factors to blame including some that were completely unforeseen such as the crisis in the Ukraine.

There are a couple of factors which were predicted long ago that are simply having more of an effect than the IDC first thought. One factor that continues to shake up the IT spending market is cloud technology. Because the IT servicing is also done by the company offering up the cloud, this changes up the budget of a company that previously was spending money on its own personal IT crew.

Most of the time, the budget is reduced quite a bit, because the spending is done with a budget that includes the cost of the cloud and the built in IT. This is one of the reasons why more and more companies are making the move to the cloud and why more companies are starting to offer up their own cloud services. Even Google has been working on making its cloud services that much better as a way to continue to draw in more customers.

The other factor that has driven forecasts down has been the drop in growth of mobile device adoption. IDC says the reduction in mobile device adoption growth can partly be blamed on price erosion but some of it simply is due to a more mature installed base.

Edited by Maurice Nagle

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