Organizations to spend more on software, despite flat IT budgets
If you are among those assuming that the global economic slowdown will put the brakes to IT spending growth this year, you would probably be half right. According to research firm Gartner, IT spending will increase by a measly 0.6 percent in 2016. But a subset of the market, software, is bucking the trend, with a project growth rate of more than 5 percent.
Those are among the conclusions of Gartner’s recent Worldwide IT Spending Forecast for 2016. The study is a best of times, worst of times analysis of where IT leaders plan to increase budgets. Overall, spending on information technology worldwide is expected to see little growth in 2016. But organizations will pony up more for data center technology, software, and IT services.
According to Gartner, worldwide IT spending is forecast to total $3.54 trillion dollars in 2016, up from $3.52 trillion dollars spent in 2014.
If this sounds like bad news, consider that last year saw the largest U.S. dollar drop in IT spending since Gartner began tracking IT spending. The firm noted that $216 billion dollars less were spent on IT in 2015 than in 2014. It further projected that 2014 spending levels won’t be surpassed until 2019.
However, the worsening economic environment in emerging markets has had little effect on the global enterprise software spending forecast for 2016, with IT spending on pace to total $326 billion, a 5.3 percent increase from 2015.
Data center systems' spending is projected to reach $75 billion in 2016, a 3 percent increase from 2015. The server market is the segment that has seen the largest change since the previous quarter's forecast, the research firm noted.
Spending in the IT services market is expected to return to growth in 2016, following a decline of 4.5 percent in 2015, the Gartner report forecasts. IT services spending is projected to reach $940 billion in 2016, up 3.1 percent from 2015. This is due to accelerating momentum in cloud infrastructure adoption and buyer acceptance of the cloud model, the report explained.