Ukraine crisis prompts IDC to slash IT spending forecast

IDC lowers growth forecast by 0.5 per cent to 4.1 per cent - below last year's figure

The saturating mobile device market and the unstable situation in Ukraine has prompted IDC to slash its global IT spending forecast to below that of last year's growth figure.

Earlier this year, IDC predicted worldwide spending on IT would rise by 4.6 per cent this year but today it has slashed the forecast to 4.1 per cent – below 2013's figure of 4.5 per cent.

"Wildcards" such as the political unrest in Ukraine and the stunted growth in the mobile device market prompted its decision to rein in the forecast.

"IT spending has been volatile since the beginning of the year, with macroeconomic wildcards including the crisis in Ukraine and the slowdown in China adding to the general sense of uncertainty which continues to impact business confidence and investment," said IDC.

Security vendor Radware was similarly concerned about the Ukrainian crisis earlier this week when it issued a threat report claiming western Europe – especially the UK – was at a seriously increased risk of a cyberattack in light of the unrest in the country.

Aside from political concerns, IDC pointed to the growth slowdown in tablet and mobile phone spending as another reason behind its pessimistic forecast.

Earlier this month, IDC said the tablet market faced a "challenging year ahead" as growth slowed to single digits in Q1. But today it said the mobile device growth decline would have an effect on overall IT spending.

"The other weak spot in the IT market since the previous quarter has been slowing growth in mobile devices – smartphones and tablets – due partly to price erosion and a more mature installed base," IDC said. "[We have] lowered the forecast for total IT spending growth this year... primarily as a result of downward revisions to mobile device forecasts."

But IDC's vice president for local technology industry research Stephen Minton said if you scratch below the surface, the IT market is still strong.

"This volatility [in the mobile market], coupled with the macroeconomic uncertainty in many emerging markets, is somewhat masking a more positive underlying foundation for enterprise IT spending, with firms continuing to invest in working off that pent-up demand to replace old servers, storage and network gear," he said.