Tech Trends

Research: IT Spending to Hit $3.5 Trillion in 2017

• By Joshua Bolkan
• 07/25/17

Worldwide IT spending is set to increase this year, according to new forecasts from International Data Corp. (IDC) and Gartner.

IDC predicts an upswing of 4.5 percent, a significant improvement over 2016's 2.5 percent growth, for total spending of $2.1 trillion in 2017. That growth will extend into 2018, according to the company, when the industry will grow by another 4 percent. When including telecom services, IDC forecasts a combined 2 percent growth for the current year, totaling $3.5 trillion for the information and communications technology market.

Gartner, which includes communications technologies in IT spending, predicts global IT sales for 2017 of $3.5 trillion, an increase of 2.4 percent over the previous year. Enterprise software will lead the growth, at 7.6 percent, according to Gartner, for a total of $351 billion.

Devices are the category that will see the second-fastest rate of growth at 3.8 percent and IT services will come in third, growing 3.1 percent over 2016. Devices and IT services will see total sales of $654 billion and $922 billion, respectively, according to the company.

Communications services will lead the way in total spending, according to the Gartner forecast, at $1.378 trillion, but sill only grow at a rate of.3 percent for the year.

Gartner also predicts that the growth will continue into 2018, forecasting a rate of 3.5 percent for that year and total spending of $3.598 trillion.

Spending on cloud computing will lead the way, according to IDC's forecast.

"The strongest growth this year will come from infrastructure hardware, enterprise software and mobile devices," according to a news release. "With cloud service providers expected to accelerate their datacenter investments in order to keep pace with growing demand for cloud services, total server spending will increase by 4 percent this year and 5 percent in 2018. Enterprise spending on server and storage infrastructure will also pick up in the second half of 2017, driven by product refresh cycles. Meanwhile, demand for infrastructure as a service (IaaS) will remain robust, with spending set to exceed $25 billion this year and more than $50 billion by 2020."

Smartphone sales will improve compared to 2016, growing 7 percent as opposed to last year's paltry 1 percent growth, for a total of $439 billion, according to the company.

"Cloud and mobile are still the big drivers for IT spending, despite the attention devoted to new technologies like augmented reality, artificial intelligence, and robotics," said Stephen Minton, vice president of customer insights and analysis, in a prepared statement. "New technologies will drive a larger share of market growth in the next 5-10 years, but the short term will also see a resurgence of growth in markets tied to 3rd platform opportunities, including cloud services, mobility and big data."

Software spending will also see growth of 7 percent this year, according to IDC's forecast, to reach $471 billion. That growth will be driven by enterprise spending on data and analytics, software-as-a-service adoption and other segments.

Spending on IT services will post a more modest growth of 3 percent for 2017.
Fixed and mobile data services will lead growth in telecom services, while voice will continue to decline.

"While overall market momentum is set to improve, some technologies will continue to drag on industry growth in the near term," added Minton. "High-end servers are expected to post another year of double-digit decline this year, while hardcopy peripheral spending will fall for the second year in a row. Overall tablet spending will also decline again, despite improving sales of hybrid and detachable models, while sales of traditional PCs and external storage systems will be broadly flat. This year will also see slowing growth for enterprise network equipment and traditional outsourcing services. For vendors still relying on 2nd platform technologies for their revenue and growth, the market will remain challenging."

The Asia and Pacific region (which does not include Japan) will see the fastest growth, at 8 percent, followed by the United States, at 4 percent.