Global IT spending to grow by 3% in 2017; Brexit impacts 2016 spend

worldwide-it-spending-forecast-source-gartnerWorldwide IT spending is forecast to reach $3.5 trillion in 2017, up 2.9 percent from 2016 estimated spending of $3.4 trillion, says the latest market forecast by Gartner.

The bright spot for the IT industry has been the software and IT services segments. Software spending is projected to grow 6 percent in 2016, and it will grow another 7.2 percent in 2017 to total $357 billion.

IT services spending is on pace to grow 3.9 percent in 2016 to reach $597 billion, and increase 4.8 percent in 2017 to reach $943 billion.

“The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016,” said John-David Lovelock, research vice president at Gartner. “Without the U.K., global IT spending growth would have been modestly positive at 0.2 percent in 2016, but with the U.K. included, IT spending is expected to decrease 0.3 percent. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase.”

Companies will be monitoring negotiations closely, and there will be some changes in IT investment. For example, in financial services, analysts expect to see some countries in Europe put more investment in IT to offer a more viable option for EU countries than the U.K.

“We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat,” Lovelock said. “There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the U.K. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the U.K.”

With the U.S. presidential election three weeks away, Gartner analysts do not believe the pending election, or the winning candidate, will have an effect IT spending trends. Typically, there is a slight pause in IT spending leading into the election, and then a relief in spending, subsequently. However, trends have shown that IT spending in the U.S. is not dependent on presidential leadership, so neither candidate should have a significant impact on IT spending in the near-term.

Source: Gartner

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