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Cut a few BILLION off projected IT spend, m'kay? – Gartner mages

Currency, market, tablets, spending, mutter ball strokers

A surge in the relative value of the dollar has caused resident mystics at Gartner to dramatically lower global tech spending forecasts by billions of dollars.

The crystal ball stroker estimates $3.73 trillion will be splashed on IT during in 2015, and if correct this equates to percentage growth of 2.4, way down on the 3.9 per cent initially expected, which had pinned the market at $3.92 trillion.

Richard Gordon, research veep at Gartner, told us currency movements led it to downgrade expectations - the dollar index hit a nine-year high last week - but he said dampening areas of the market also played some part.

“The tablet market is slowing down as consumers shift towards phablets and because notebooks are more compelling - thinner and lighter. The appeal of tablets is diminished at the moment,” said Gordon.

Slab buying cycles are stretched from 2.8 to three years, Gartner pointed out in October, and the impact of this was 83m fewer fondlers finding a new home last year than the analyst had originally forecast.

Smartphones and ultra portables are expected to help the Device sector post spending growth of 5.1 per cent to $696bn, as the declining traditional PC market returns to business as usual following an XP induced lift.

IT Services, another area where sales forecasts are now more moderate, is predicted to grow 2.6 per cent to $956bn. Gordon said the sector was tied to discretionary spend and businesses were “reluctant” to sign off multi-year contracts.

“IT services [projects] have not come on strong, it’s a confidence thing” the Gartner man said, and “the global economy has been growing since the recession but there’s still a hangover in terms of business investments”.

Telecom Services is the third area where forecasts were pulled down, with 0.7 per cent growth anticipated for the year, taking the size of the prize to $1.62 trillion.

“This is a legacy market with huge spend but it doesn’t grow very fast,” said the research veep.

Recovery in the Data Centre Systems space is mooted to continue, with spending projected to hit $141bn by year end, a rise of 1.8 per cent. The rise of the hyper scale data centre is driving part of this but traditional servers are commoditised and storage and networking remains “sluggish”.

Enterprise Software is forecast to again be the fastest growing segment in the industry, up 5.5 per cent to $317bn by the close of December, if Gartner’s powers of prediction are correct.

Customers are moving from traditional license and maintenance procurement to cloud and Software-as-a-Service models that are generally conceived to be more flexible, and this will drive competition with “traditional software vendors reacting to that”.

Presumably Gartner will re-forecast again if the situation with the dollar changes markedly, but the analyst warned other geopolitical and macro-economic factors would “add uncertainty to investments”.

“Business confidence is improved but there is still some caution ... Russia, the oil price, the Middle East,” he said.

After recent years the industry will take growth where it can get it, even if it is low single digits. ®

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