IT spending for 2018 highest since 2007

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IT spending for 2018 highest since 2007

Predictions from Gartner suggest that global IT spending in 2018 will grow at its highest level since 2007. As a result, the research firm is advising business leaders to prepare for a “new cycle of IT growth.”

According to the latest forecast, IT spend is set to increase 6.2% from 2017, reaching a projected total of $3.7 trillion this year.

Research vice president at Gartner, John-David Lovelock, explained that global IT spend is “growing at expected levels” and is in line with predicted global economic growth. Another main reason for the strong growth is the declining US dollar, which is causing tailwinds.

Lovelock added: “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.”

When looking at a breakdown of the spend, enterprise software is expected to see the greatest growth in 2018, increasing 11.1% to $391bn. It is thought that organisations undergoing digital transformation will play a key role in this increase. Digitalisation will help the growth of the software industry, with modernisation initiatives set to continue the rise of application software spending and infrastructure software through 2019.

While spend on data centre systems ended strongly in 2017, the forecast for 2018 is a growth rate of 3.7%, down from 6.3% in the previous year. Looking at the longer term, there continue to be challenges, especially for the storage segment.

The strength witnessed at the end of 2017 was primarily driven by the component shortage for memory components. Prices have now risen at a greater rate than predicted. It was previously expected that component shortages would ease in 2018 but a revision suggests that they will continue throughout the year. Supply is not expected to ease until the end of 2018.

Meanwhile, investment in devices, such as PCs, tablets and mobile phones, is expected to grow 6.6% this year, reaching $706bn, up from $663bn in 2017.

“The device market continues to see dual dynamics,” Lovelock commented. “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 ultramobile premium devices, ultramobile utility devices, and basic phones is expected to be slow.”

Elsewhere, IT services and communications services are also forecast to show growth in 2018, rising 7.4% and 4.3%, respectively.

With IT spending increasing, TechRepublic notes that it is imperative CTOs get their tech budgets in line to ensure the necessary allocation of funding for the year ahead.

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