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October 20, 2016
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Global IT spending is slated to rise slightly in 2017, with enterprises looking to invest about $3.5 trillion on technology in the next year -- an increase of 2.9% compared to the estimated figure for 2016, according to Gartner, which released its latest forecast on Wednesday at its Symposium/ITxpo show in Orlando.
While the investment increase in not as robust as in past years, it's better than the current state. IT spending is expected to total $3.4 trillion this year, a decrease of about 0.3% between 2015 and 2016. It appears the decision for the UK to leave the EU -- Brexit -- caused IT spending to dip in the second half of the year.
"Without the U.K., global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the U.K. included, IT spending is expected to decrease 0.3 percent," John-David Lovelock, research vice president at Gartner, wrote in an Oct. 19 statement. "The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase."
While IT spending is expected to inch back in 2017, most of the money will be spent on software and services. Specifically, Gartner estimates that even when calculating for Brexit, spending on software is expected to increase about 6% this year and total about $357 billion in 2017 -- a 7.2% increase.
On the services side, spending is expected to increase 3.9% between 2015 and 2016, with a forecast of $900 billion this year. In 2017, that number is predicted to reach $943 billion -- a 4.8% increase.
Gartner's analysts found that in the wake of Brexit, one of the reasons that spending on services and software will increase, especially in Europe, is that many countries are looking to take over the dominant position London holds in the world's financial markets.
France, Germany, Luxemburg, the Netherlands, and even Ireland are looking to become the next banker of choice for Western Europe, as well as other parts of the globe. These countries need to increase their IT infrastructure to serve those needs.
Back across the pond, Gartner finds that the US presidential election between Democrat Hillary Clinton and Republican Donald Trump will have little to no effect on IT spending, although companies traditionally tend to slow their spending in the weeks and months leading up to Election Day in November.
"However, trends have shown that IT spending in the U.S. is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term," according to Gartner's report.
In addition to software and services, the Gartner report also looks at three other areas of IT spending: communications services, data center systems, and devices.
In 2017, enterprises are expected to invest about $177 billion in data center systems -- an increase of 2% over 2016 -- and $1.4 trillion on communications, also about a 2% increase over this year.
The one area that looks flat for 2017 is devices. Spending is only expected to increase 0.4% to reach about $600 billion -- a modest increase, but better than the 7.5% decrease expected this year.
That number shouldn't come as a surprise, since Gartner and IDC have both found that spending on mobile and PCs dropped in 2016, and these markets are expected to increase moderately in the next 12 months.
About the Author(s)
Director of Audience Development, UBM Tech
Scott works with the editors and editorial directors of InformationWeek, Dark Reading, and Network Computing to help build audience engagement for all three publications. He also oversees editorial newsletters for InformationWeek and works as the day-to-day news editor for InformationWeek. Scott is the former Editor in Chief of eWeek. He oversaw day-to-day operation of eWeek.com, as well as eWeek Magazine, until the print publication stopped in 2012 and eWeek became an all-digital publication, with tablet and smartphone editions. He worked for more than six years at eWeek, starting as a staff writer covering microprocessors, PCs, servers, virtualization, and the channel. Scott also worked in a number of editorial positions, including that of managing editor, while helping to shape the publication's core coverage of enterprise applications, mobility, and cloud computing. Before starting at eWeek in 2006, he worked for the Asbury Park Press of Neptune, N.J., where he covered law enforcement, the courts, and municipal government for four years. He also worked at the Herald News of Woodland Park, NJ, where he covered a number of different beats. Scott has degrees in journalism and history from William Paterson University.
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