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2014 IT Spending Forecast: Slightly Slower Growth Than Expected

One industry forecast of worldwide spending is being revised slightly downward, despite market improvements in the United States, Canada and Western Europe. The main culprits behind the slowdown seem to be mobile devices and "macroeconomic wildcards."

In 2013, according to IDC, worldwide IT spending surpassed $2 trillion for the first time ever, with hardware topping $1 trillion for the first time. The forecast for 2014 had been 5 percent growth on top of that, but that figure was quickly revised to 4.6 percent. Now it's being revised again, this time to 4.1 percent.

IDC previously forecast that mobile devices would reach half a trillion dollars this year. However, in mature markets, where mobile device penetration is deep, growth has been slowing for the last two quarters.

"As smartphone growth continues to cool from the phenomenal expansion of the past few years, tablet shipments have performed weaker than expected over the past couple of quarters," said Stephen Minton, vice president in IDC's Global Technology & Industry Research Organization, in a prepared statement. "This volatility, coupled with the macroeconomic uncertainty in many emerging markets, is somewhat masking a more positive underlying foundation for enterprise IT spending, with firms continuing to invest in working off that pent-up demand to replace old servers, storage and network gear. Some of that spending is also driving IT services, despite the fact that an increasing number of businesses are moving more of their traditional IT budget to the Cloud."

Other findings in the revised forecast include:

  • 10 percent of software spending will move to the cloud by the end of this year;
  • The United States will rebound to positive growth in servers and storage this year;
  • IT services spending will grow more than 2 percent this year;
  • Infrastructure as a service (IaaS) will "represent 15 percent of all spending on servers and storage";
  • Despite sluggish mobile device spending, mature markets will see stronger than anticipated spending in 2014, particularly in the second half of the year.

"Over the past year, most of the surprises on the upside have come from mature markets," said Stephen. "Japan had a strong year in 2013, and a similar pattern is expected this year in North America and Western Europe. We still expect that businesses will choose to fix the roof while the sun is shining in the second half of 2014, as part of a general infrastructure investment cycle."

The revised forecast is part of IDC's Worldwide Black Book, which forecasts IT spending in hardware, software, IT services and telecommunications for 54 countries.

 

About the Author

David Nagel is the executive producer for 1105 Media's online K-12 and higher education publications and electronic newsletters. He can be reached at dnagel@1105media.com. He can now be followed on Twitter at http://twitter.com/THEJournalDave (K-12) or http://twitter.com/CampusTechDave (higher education). You can also connect with him on LinkedIn at http://www.linkedin.com/profile/view?id=10390192.

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