IT_Spend_Forecast_Q22013

IT spend globally — from devices through to data center investments and the services that run on them — it set to reach $3.7 trillion in 2013, but that represents shrinking growth of only 2% on 2012, as more expensive items like PCs and on-premise software continue to get pushed out by less expensive, newer things like lower-cost tablets and cloud services. Gartner, the analyst house publishing these numbers today, projects spend for 2014 to rise to $3.9 trillion, up 4.1%.

Important to note that these figures do not include the vast amounts of money that we as consumers spend online, for example via e-commerce and in apps; nor does it include services like advertising, which are often used to “pay” for content indirectly. “This may change in the future but at the moment it’s excluded,” Richard Gordon, managing vice president at Gartner, tells me.

Be that as it may, these figures, which do include global numbers on IT devices, provide a good barometer for how and where the wider IT world is growing.

The $3.7 trillion in IT spend in 2013 represents a downward revision from where Gartner thought we would be today: compare to last quarter, when Gartner noted growth of 4.1% for this year; that is now more than halved. (You can see comparative projections here.) One of the main reasons for this, Gartner notes, is because of currency fluctuations. In constant currency, growth would still be down compared to 2012, but less so, to 3.5%.

Looking at the table below, one of the bigger categories contributing to the lower forecasts comes from declines in IT devices, which Gartner has revised down to growing only 2.8% this year, or $695 billion, compared to a previous projection of 7.9%.

This is directly linked to trends in what people are buying today for their computing needs: out go bigger and more expensive PCs; in come smaller, and often less expensive, tablets, smartphones — and even smaller devices.

Last week, Gartner noted that although PCs are still the second-largest category of IT devices, shipments of these are dropping fast, while those for mobile phones and tablets continue to climb. In all, there will be 2.4 billion devices shipped in 2013, up 6% on last year, Gartner said.

Today, the analysts spell that out in revenue numbers that tablet revenue will grow by a mammoth 38.9% and mobile devices by 9.3%; but in PCs, “while new devices are set to hit the market in the second half of 2013, they will fail to compensate for the underlying weakness of the traditional PC market,” Gartner notes.

The biggest category of all has been and continues to be telecoms services, which includes things like broadband, telephone services and your mobile bills. These will rise to $1.7 trillion in 2013 — growth of only 0.9%, but at least reversing the declines of -0.7% the year before.

Gartner doesn’t reveal much on what’s going on here, except to point out the fixed broadband is doing better than it had expected and that voice substitution, in which users are switching to cheaper VoIP services or mobile services from traditional landlines, is not taking over as fast among enterprises as consumers. Clearly, one of the bigger trends here is the same one that is driving the devices category: people are going wireless not just for their computing, but for all of their communication needs.

Enterprise software remains one of the smaller categories but growing the strongest: $304 billion will be spent on enterprise this year, a rise of 6.4%. IT services and data centers will each grow only around 2%.

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