Gartner: IT spending to hit $3.5 trillion in 2017

Software vendors that embrace cloud are enjoying a boom, suggests Gartner

Analyst group Gartner has forecast that worldwide IT spending will rise to $3.5 trillion in 2017, up 2.4 per cent compared to 2016 - an increase driven by digital transformation projects

"Digital business is having a profound effect on the way business is done and how it is supported," said John-David Lovelock, research vice president at Gartner.

"The impact of digital business is giving rise to new categories, for example, the convergence of software plus services plus intellectual property. These next-generation offerings are fuelled by business and technology platforms that will be the driver for new categories of spending."

The increase in IT spending around the world has been partly attributed by Gartner to the decline of the US dollar against various foreign currencies. The forecast in dollar values was revised downwards by 1.3 per cent, to 1.4 per cent. Though Brexit shocked currency markets and led to a decline in value of the British pound, this did not lead to any disruption in the global IT market.

According to Gartner, the global enterprise software market is set to grow by 7.6 per cent, an acceleration in growth compared to the 5.3 per cent growth in 2016, despite the growing impact of cloud computing on packaged software sales.

Instead, software companies are collecting revenue via digital avenues and subscriptions, which Lovelock warns will necessitate greater automation and a steady stream of new applications and functionality.

Indeed, rather than cloud computing cutting software spending, software vendors that have embraced cloud have seen sales increase, with their software running on cloud infrastructures rather than in-house purchased hardware.

"If the I&O [infrastructure and operations] team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions."

Despite the growth in cloud computing services, the data centre systems market has remained somewhat moribund in comparison. This is largely due to a decline in sales of servers for running on-premise software.

The device market, meanwhile, is forecast to increase 1.6 per cent in dollars, while the IT services market is set to grow 4.6 per cent in constant currency.

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