March 7, 2017
With economic uncertainty and volatility impacting business and consumer confidence, technology markets are in for a rocky ride over the next 18 months, according to the latest Worldwide Black Book from International Data Corporation (IDC).
The quarterly review of information and communications technology (ICT) spending in 89 countries found that ICT spending overall will increase by 3% this year in constant currency terms to $3.5 trillion, a slight improvement on last year’s 2% growth rate. IDC says this is mainly due to improvements in emerging markets and a general pickup in infrastructure spending.
IT spending (excluding telecommunications) will also grow by 3% this year. Last year’s slow pace represented a significant slowdown from the 5-6% IT spending growth recorded from 2012-2015, and resulted from a slowdown in enterprise capital spending, weak consumer upgrades of PCs, phones, and tablets, and ongoing sluggishness in IT services.
Cloud will continue to drive much of the ICT spending story, as more businesses move to adopt cloud services. This will continue to drive aggressive hardware spending by cloud service providers (CSPs), although the next major upgrade cycle will not begin until later in 2017. From an end-user perspective, infrastructure-as-a-service (IaaS) spending will increase by 40% this year, accounting for an ever-increasing share of enterprise infrastructure budgets.
“The cloud has come to dominate the ICT market outlook in many ways,” said Stephen Minton, program vice president in IDC’s customer insights and analysis group. “It drives capital spending cycles for hardware manufacturers and represents an increasing proportion of the customer base for server and storage vendors. From a software standpoint, software-as-a-service (SaaS) and platform-as-a-service (PaaS) already account for almost 20% of all software spending and rising, while cloud adoption is also driving increasing usage of telecom services and investment in network equipment.”