In 2017, global IT spending will hit about $3.5 trillion, a 2.4 percent rise over 2016, fueled partly by new purchases of replacement smartphones and PCs as part of business and consumer technology refreshes, according to the latest worldwide IT spending forecast from research firm, Gartner.
Global device purchases are expected to rise by 3.8 percent for 2017 to $654 billion, up from $630 billion in 2016, with 2018 growth expected to be in the 3.6 percent range, according to the Gartner study. Also seeing a healthy boost will be enterprise software purchases, which are expected to rise by 7.6 percent in 2017 to $351 billion, up from $326 billion in 2016.
IT services purchases are expected to rise by 3.1 percent in 2017 to $922 billion, which is up from $894 billion in 2016, while data center systems spending will rise by only 0.3 percent to $171 billion, a slight increase over 2016's $170 billion in spending. Communications service spending is also expected to see only a small 0.3 percent increase to $1.378 trillion in 2016, which is up slightly from $1.374 spent in 2016, the report states.
"The nice adjustment that is happening this year or next year is a resurgence of mobile phone purchases and a jump in PC purchases by enterprises," John-David Lovelock, an analyst with Gartner, told ITPro. "The PC and mobile phone sales forecasts have been down for a long time, but we have a replacement cycle bubble that we are going into later this year or next year" which will lead to expected sales growth in both categories going into 2018.
Consumer purchases of PCs, mobile phones and other devices are also included in the projections.
The sales bump in PCs seen in the study is largely being driven by the move to Windows 10 and because many enterprises and smaller businesses have been holding on to their older PCs for as long as 3 years without a refresh, which is up from the 18- to 24-month refresh cycles seen in the past, said Lovelock.
Once those replacement purchases occur, though, the PC industry will likely be seeing sales drops again for the following three years, he added.
Consumer phone purchases are expected to grow at 8.5 percent this year, with a drop to one to two percent growth annually from 2019 to 2021, said Lovelock.
Other changes continue in corporate IT spending, such as the demand of many CEOs to gain revenue growth for their companies through improvements in IT which support or enable new business, said Lovelock. "That shows why the spending today is where it is," he added.
"IT is no longer about just running the internals of the business and driving out costs where they can," said Lovelock. "It has shifted to enabling new business and fulfilling on the CEO's desire for top-line revenue growth. So spending changes from data centers to artificial intelligence, augmented reality and other new technologies that will drive business."
The latest Gartner estimates show this evolution, he said, with more spending on software, services consulting, open source and more to make it all happen. "That changes the stack of what you spend money on. Not so much devices but a lot of services and software."
Gartner's IT spending forecast methodology uses deep analyses of sales by thousands of vendors across the entire range of IT products and services, as well as primary and secondary research techniques and sources, according to the company.