IT spending will reach $3.8 trillion in 2015, a 2.4 percent increase from last year, according to a new forecast released by market research firm Gartner today.
Previously, Gartner had expected organizations to push the market up by 3.7 percent, but a strengthening U.S. dollar made the analyst group revisit its numbers. “The change in forecast is less dramatic than it might at first seem. The rising U.S. dollar is chiefly responsible for the change — in constant currency terms the downward revision is only 0.1 percent,” said Gartner vice president John-David Lovelock, in a statement.
“Stripping out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.7 percent, which compares with 3.8 percent in the previous quarter’s forecast,” continued Lovelock.
Leading the charge is rising demand for enterprise software solutions. Spending on business applications and other software tools will grow 5.5 percent to reach $335 billion this year as cloud and on-premise software vendors duke it out.
“More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers,” said Gartner in a statement.
“In particular, in the customer relationship management (CRM) market, a key cloud battleground, seat prices for segments such as sales force automation (SFA) are expected to decline by 25 percent through 2018,” Gartner added. Organizations can also expect prices to drop on cloud-delivered database management system (DBMS) solutions as well as application infrastructure and middleware offerings.
Data center operators will increase their hardware spending by 1.8 percent this year compared to 2015, for a total of $143 billion. “Growth for the enterprise communications applications and enterprise network equipment segments of the market have been increased from the previous quarter’s forecast, while growth for the servers and external controller-based storage segments has been lowered,” stated Gartner.
Again, the cloud is casting a big shadow over the tech industry. “These growth fluctuations are due to extensions in replacement life cycles and a higher than previously anticipated switch to cloud-based services,” concluded Gartner.
Spending in the devices category, mainly comprised of PCs, tablets, smartphones and peripherals, will reach $143 billion in 2015, a 1.8 percent rise compared to 2014. Here, Apple and Google are locked in a battle for mobile users, endangering the market for midrange phones.
In 2014, Apple’s iPhone commanded the premium phone segment with an average selling price of $478. “At the other end of the spectrum, growth in Android and other open OS phones is in the basic phone segment, where in 2014 the average phone cost less than $100. As a result, the market opportunity is becoming increasingly limited for midrange smartphones,” concluded Gartner.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.