Gartner takes scythe to IT spending forecast

Analysts warns over 'undercurrent of economic uncertainty' as it says worldwide IT spending will decline 0.5 per cent in 2016

Gartner is no longer predicting the global IT market will grow this year after slashing its annual spending forecast.

According to the market watcher, worldwide IT spending will fall 0.5 per cent to $3.49trn, with the device market set to fall by 3.7 per cent.

This is down from Gartner's previous forecast last quarter of 0.5 per cent growth. The change in the forecast is mainly due to currency fluctuations.

"There is an undercurrent of economic uncertainty that is driving organisations to tighten their belts, and IT spending is one of the casualties," explained John-David Lovelock, research vice president at Gartner.

"Concurrently, the need to invest in IT to support digital business is more urgent than ever. Business leaders know that they need to become digital businesses or face irrelevance in a digital world. To make that happen, leaders are engaging in tough cost optimisation efforts in some areas to fund digital business in others."

The devices market will be the worst hit, Gartner said, with spending down 3.7 per cent to $626bn, Gartner said, adding that PC and ultramobile expenditure will fall this year.

Spending on datacentre systems is projected to reach $175bn in 2016, a 2.1 per cent increase from 2015. Also expected to increase is global enterprise software spending, up 4.2 per cent to $321bn.

Spending in the IT services market is expected to return to growth in 2016, totalling $929bn, up 2.1 per cent from 2015.

But telecom service spending is projected to decline 2.0 per cent in 2016, with spending reaching $1.4trn. Gartner attributes this decline to continuing economic downturns in major markets including Russia and Brazil.

The 0.5 per cent drop still represents a relative rebound from 2015, when overall global IT spending sank by six per cent, according to Gartner.