Gartner forecasts highest IT spending in over 10 years

Analyst says new cycle of IT growth is imminent, driven by increase in demand for enterprise software and continued services spending

The IT industry is set for a new cycle of growth with worldwide spending projected to top $3.7tn this year, according to Gartner.

The analyst is expecting spending in 2018 to jump 6.2 per cent on last year's $3.5tn, with enterprise software set to be the fastest growing of Gartner's five spending categories, at 11 per cent.

Communications services will continue to be the largest segment and is expected to account for around £1.45tn of the overall spend this year.

All five categories are expected to see growth, but the rate of datacentre spending is expected to decline to 3.7 per cent, compared with 6.3 per cent last year. All of the other four categories are expected to see stronger growth than last year.

John-David Lovelock, research vice president at Gartner, attributed the overall increase in spending to currency fluctuations and political uncertainty.

"Although global IT spending is forecast to grow 6.2 per cent this year, the declining US dollar has caused currency tailwinds, which are the main reason for this strong growth," he said. "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 US 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 trade wars."

Gartner said that datacentre sales will continue to face challenges, particularly in storage, with a brief renaissance at the end of 2017 attributed to a components shortage which inflated prices.

The devices segment will however continue to flourish, albeit with fewer users buying new devices.

"The device market continues to see dual dynamics," Lovelock said.

"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 phones is expected to be slow."

A table of Gartner's forecasts can be seen below (spending in billions of US dollars)