While a slowdown in this department may come as a surprise to many, it’s a reality that we’ve been told to expect.
Worldwide IT spending is expected to post a major slowdown in 2016, as economic weakness in emerging markets and saturation of the smartphone market combine to result in a significantly slower pace of tech spending growth compared to the past six years, reads a new post from IDC.
Having posted annual growth of 5-6% in constant currency terms since recovery from the financial crisis in 2010, the global IT market is expected to increase by just 2% this year (in constant currency). Total IT spending on hardware, software and services will reach $2.3 trillion in 2016. Including telecom services, total ICT spending will increase by 2% to $3.8 trillion.
“Aside from exchange rate volatility, IT spending has been relatively stable for the past five years,” said Stephen Minton, Vice President with IDC’s Customer Insights and Analysis group. “Excluding mobile phones, overall tech spending has continued to grow at 3-4% each year in constant currency terms since we recovered from the disruption of the financial crisis. A solid PC upgrade cycle in 2014 was followed by a major cycle of infrastructure spending in 2015, mostly driven by cloud. IT buyers continue to prioritize software investments like data analytics and enterprise mobility, and have increasingly leveraged the service provider model in order to increase the effectiveness of their IT budgets. Underlying buyer sentiment is strong.”