IT Spending to Rebound to Nearly $3.5 Trillion in 2017

The political and economic fallout of the Brexit vote is negatively impacting IT spending this year, but the market is set to perk back up next year says Gartner.

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Blame Brexit.

The UK's vote to leave the bloc of European Union (EU) nations will cause a 0.3 percent drop in worldwide IT spending this year, to nearly $3.4 trillion, according to the latest forecast from Gartner. Without the Brexit's effects, the market would have experienced modest growth of 0.2 percent.

Gartner analyst John-David Lovelock explains that while uncertainty surrounding the Brexit negotiation process and its aftermath is having an effect on the technology buying decisions of businesses in the affected regions, "the British Pound plays a more immediate and direct role." The British pound plunged after the historic June 23 vote, making imports more expensive to purchase.

In the EU, Gartner observed that spending on software and IT services is picking up in Germany and France. IT spending is also up in Netherlands, Luxembourg and Ireland while banks explore the possibility of establishing operations outside of the UK.

On the U.S. side of the pond, Gartner predicts that IT spending patterns will remain largely unaffected by the 2016 presidential election and its results, at least in the near-term.

The good news is that IT spending will jump 2.9 percent in 2017, reaching $3.5 trillion.

The software and IT services segments will be the biggest winners next year. Software vendors are poised to rake in $357 billion in 2017, a 7.2 percent gain. Meanwhile, spending with IT service providers will hit $943 billion, a 4.8 percent jump.

In fact, all segments will experience growth. The data center systems category is expected to reach $177 billion in 2017, a 2-percent increase, and the communication services segment is predicted to rise 1.9 percent to $1.4 trillion.

Even the devices category, beset by a persistent decline in PC sales, is expected to bounce back somewhat next year. After shedding 7.5 percent in 2016 ($597 billion), the segment will see a 0.4-percent gain, attracting $600 billion in IT spending.

"Devices have a small rebound in 2017, mostly down to the stabilization of the PC market," Lovelock told Datamation. "Windows 10 allowed consumers and enterprises to hold old printers a little longer. By 2017, this stall in the replacement cycle will resolve by 2017 and normal purchasing patterns should return."

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.




Tags: IT management, IT spending, Brexit


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