Worldwide IT spending is on pace to total $3.8 trillion in 2015, a 2.4 per cent increase from 2014; however, this growth rate is down from earlier projections of 3.9 per cent. The slower outlook for 2015 is largely attributed to the rising U.S. dollar as well as a modest reduction in growth expectations for devices, IT services and telecom services.
The change in forecast is less dramatic than it might at first seem. The rising U.S. dollar is chiefly responsible for the change — in constant currency terms the downward revision is only 0.1 per cent. Stripping out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.7 per cent, which compares with 3.8 per cent in the previous quarter’s forecast.
IT spending in Canada is forecast to total $93 billion in U.S. dollars in 2015, a 2.3 per cent increase from 2014 spending of $91 billion. Spending in Canada will be driven by healthy growth in the banking and manufacturing industries and overall growth in enterprise application software and mobile data service.
The worldwide growth rate on devices (including PCs, ultramobiles, mobile phones, tablets and printers) for 2015 was decreased by 1.3 percentage points to 5.1 pe rcent. The growth rate for devices in Canada is forecast to decline 7.5 per cent in 2015. Consumer demand for devices is down across the board, with every form factor posting negative growth in 2015, except for the premium ultraportables market which posted a stellar 54 per cent growth in units shipped over 2014 levels.
Worldwide data center systems spending is projected to reach $143 billion in 2015, a 1.8 per cent increase from 2014. Spending on data center systems in Canada is forecast to be flat in 2015. Extensions in replacement life cycles and a higher than previously anticipated switch to cloud-based services are driving spending in this market.
In the worldwide enterprise software market, spending is on pace to total $335 billion, a 5.5 per cent increase from 2014. In Canada, the enterprise software market is expected to grow to $10.1 billion, up from $9.4 billion in 2014. More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers. In particular, in the customer relationship management (CRM) market, a key cloud battleground, seat prices for segments such as sales force automation (SFA) are expected to decline through 2018.
The global outlook for IT services in 2015 has been reduced to 2.5 per cent growth, down from the 4.1 per cent growth forecast in the previous quarter. In Canada, the IT services market is expected to grow 4.8 per cent in 2015. Globally, reductions to software support services contributed disproportionately to a lower outlook through 2018, because of lower growth rates expected for enterprise software.
Worldwide telecom services spending is projected to grow 0.7 per cent in 2015, with spending reaching $1,638 trillion. Canadian telecom services are forecast to grow 2.7 per cent in 2015 to $37.1 billion. A multitude of factors have affected each national market — some positive, others negative — with the primary driver for growth being a reduction in expectations for mobile voice revenue across several markets in Western and Eastern Europe (such as Austria and Italy) as a consequence of the declining growth of new devices sold in the region over the forecast period.
The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.
John Lovelock is research vice president at Gartner, focusing on IT market forecasting.