Worldwide IT spending set to shrink according to Gartner
However, it's not as dismal as it seems with less favourable exchange rates accounting for much of the shift
Worldwide IT spending will decrease by 1.3 per cent in 2015, with the rising dollar value to blame, in addition to slowing PC sales in some regions and the move to the cloud.
So says analyst firm Gartner, which predicts there will be increases in spend when it comes to datacentre investment, which is projected to reach $142 billion in 2015.
The research firm said the datacentre sector will be least affected by currency fluctuations because vendors are encouraged to be competitive when it comes to spending due to lower margins compared to hardware sales.
Enterprise software will also see gains, set to total $320 billion in 2015, accounting for a 2.3 per cent increase from 2014. However, the report said rising hardware prices are encouraging companies are holding onto their hardware solutions for longer, adding on SaaS options such as Office 365 or Salesforce.com to add new functionality at relatively low cost. As such, the PC, mobile phone and tablet markets are experiencing reduced investment. PC purchases, in particular, have seen the biggest losses in Western Europe, Russia and Japan because local currencies have been devalued against the dollar.
John-David Lovelock, research vice president at Gartner said: "The recent rapid rise in the value of the US dollar against most currencies has put a currency shock into the global IT market. Taking out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.1 per cent, only off 0.6 per cent from last quarter's update."
"The simple implication is that there will be price rises. However, there are many other market forces at work protecting US dollar profits will require a nuanced and multifaceted approach involving pricing, partners and product management."
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