Spending on IT and telecom to grow 3.7 percent to $4 trillion: IDC

Dollar spending on technology
Spending on IT and telecommunications will grow 3.7 percent to reach $4 trillion in 2018 against 4.2 percent growth achieved in 2017, according to IDC.

A weakening economy related in part to tariffs, rising interest rates, and slowing growth in China, along with the end of a capital spending cycle, will pull down growth to less than 3 percent next year as tech spending lags behind GDP growth.

The annual spending on IT and telecom will exceed $4.5 trillion by 2022. The strongest growth will be from software and services related to 3rd Platform and digital transformation projects.

Hardware investments will be led by cloud service provider spending on server/storage infrastructure. Weaker growth is expected from PCs and tablets, peripherals, external storage systems, and traditional outsourcing.

Server / storage spending is driven by cloud hyperscale datacenter buildout and a significant enterprise upgrade cycle related to product refreshes. IT infrastructure spending, including network equipment, increased by 11 percent in 2017 and will continue to post annual growth in the range of 8-12 percent over the next five years.

“The infrastructure market is increasingly stable because a large proportion is now tied to the service provider model and overall demand for cloud services, which shows no sign of slowing down even in the event of a weakening economy,” said Stephen Minton, vice president, Customer Insights & Analysis at IDC.

The IDC report said Cloud and mobile are the big drivers for traditional ICT spending, as legacy products and services like desktop PCs and fixed-line networks either stagnate or begin to decline.

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