U.S. IT Spending to See Steady Growth in 2016 Despite Worldwide Slump

IT spending in the United States will be stable in 2016, experiencing mild growth on par with previous years, according to a new forecast by market research firm IDC.

The forecast calls for a slowdown in worldwide IT spending. However, despite the global slump — enabled in part through a slowdown in PC sales — IT spending in the United States will climb 4 percent during the year, the same rate of growth seen in the previous three years.

Barring any disruptions to the larger economy, this 4 percent growth trend is expected to continue into 2017 as well, IDC noted.

According to IDC's Worldwide Black Book, "Total IT spending on hardware, software and services will reach $2.3 trillion in 2016. Including telecom services, total ICT spending will increase by 2 percent to $3.8 trillion." IDC's research does not break down spending by sector but focuses on IT expenditures worldwide across all industries.

"IT spending was relatively stable in 2015, in spite of the volatile economy, propelled by another strong year for smart phone shipments, which compensated for a weakening PC market throughout the year," according to IDC. "Smart phones accounted for half of the overall industry growth rate of 6 percent in 2015. Spending on cloud infrastructure was also strong throughout the year, resulting in growth of 16 percent for the server market and 10 percent for storage systems. Enterprise spending on software, including SaaS, posted healthy growth of 7 percent with strong investment in analytics, security, and collaborative applications. However, the strong U.S. dollar made 2015 an uncomfortable year for U.S.-based IT companies. In U.S. dollar terms, the overall IT market declined by 2 percent last year, and exchange rate volatility remains a wild card which could influence the fortunes of IT suppliers over the next 12 months."

"Aside from exchange rate volatility, IT spending has been relatively stable for the past five years," said Stephen Minton, vice president with IDC's Customer Insights and Analysis group. "Excluding mobile phones, overall tech spending has continued to grow at 3 percent to 4 percent each year in constant currency terms since we recovered from the disruption of the financial crisis. A solid PC upgrade cycle in 2014 was followed by a major cycle of infrastructure spending in 2015, mostly driven by cloud. IT buyers continue to prioritize software investments like data analytics and enterprise mobility, and have increasingly leveraged the service provider model in order to increase the effectiveness of their IT budgets. Underlying buyer sentiment is strong."

About the Author

David Nagel is the former editorial director of 1105 Media's Education Group and editor-in-chief of THE Journal, STEAM Universe, and Spaces4Learning. A 30-year publishing veteran, Nagel has led or contributed to dozens of technology, art, marketing, media, and business publications.

He can be reached at [email protected]. You can also connect with him on LinkedIn at https://www.linkedin.com/in/davidrnagel/ .


Featured

  • an online form with checkboxes, a shield icon for security, and a lock symbol for privacy, set against a clean, monochromatic background

    Educause HECVAT Vendor Assessment Tool Gets an Upgrade

    Educause has announced HECVAT 4, the latest update to its Higher Education Community Vendor Assessment Toolkit.

  • illustration of a football stadium with helmet on the left and laptop with ed tech icons on the right

    The 2025 NFL Draft and Ed Tech Selection: A Strategic Parallel

    In the fast-evolving landscape of collegiate football, the NFL, and higher education, one might not immediately draw connections between the 2025 NFL Draft and the selection of proper educational technology for a college campus. However, upon closer examination, both processes share striking similarities: a rigorous assessment of needs, long-term strategic impact, talent or tool evaluation, financial considerations, and adaptability to a dynamic future.

  • university building surrounded by icons for AI, checklists, and data governance

    Improving AI Governance for Stronger University Compliance and Innovation

    AI can generate valuable insights for higher education institutions and it can be used to enhance the teaching process itself. The caveat is that this can only be achieved when universities adopt a strategic and proactive set of data and process management policies for their use of AI.

  • DeepSeek on AWS

    AWS Offers DeepSeek-R1 as Fully Managed Serverless Model, Recommends Guardrails

    Amazon Web Services (AWS) has announced the availability of DeepSeek-R1 as a fully managed serverless AI model, enabling developers to build and deploy it without having to manage the underlying infrastructure.