Gartner predicts 1.4% IT spending growth in 2017

Worldwide IT spending is set to top $3.5 trillion in 2017, a 1.4% increase from 2016, according to Gartner.

However, the growth rate is down from a forecast of 2.7%, which the analyst firm attributed in part to the rising US dollar.

John-David Lovelock, research VP at Gartner, said that the strong US dollar has cut $67 billion out of its 2017 IT spending forecast. "We expect these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017," he said.

The analyst house predicted that the data centre system market is expected to grow 0.3% in 2017. While this is up from negative growth in 2016, it is experiencing a slowdown in the server market.

"We are seeing a shift in who is buying servers and who they are buying them from," said Lovelock. "Organisations are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers, which is impacting the overall data centre system segment."

Driven by strength in mobile phone sales and smaller improvements in sales of printers, PCs and tablets, worldwide spending on devices (PCs, tablets, ultramobilesand mobile phones) is projected to grow 1.7% in 2017, to reach $645 billion. This is up from a 2.6% decline in 2016.

Mobile phone growth in 2017 will be driven by increased average selling prices (ASPs) for phones in emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone.

The tablet market continued to decline significantly, as replacement cycles remain extended and both sales and ownership of desktop PCs and laptops are negative throughout the forecast, said Gartner. Over the course of this year, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase, added the analyst firm.

The global IT services market is forecast to grow 2.3% in 2017, down from 3.6% growth in 2016. The analysts said that modest changes to the IT services forecast this quarter can be "characterised as adjustments to particular geographies as a result of potential changes of direction anticipated regarding US policy both foreign and domestic".

Gartner added that business-friendly policies of the new US administration are expected to have a slightly positive impact on the US implementation service market as the US government is expected to significantly increase its infrastructure spending during the next few years.

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