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IT spending set to reach the trillions, with devices a big game changer

21 Jan 2015

Worldwide IT spending on the rise and is set to be $3.8 trillion by 2015, according to Gartner, with the amount spent on devices forecast to be the most significant expenditure increase.

In 2014 NZD $905 billion was spent on devices and in 2015 NZD $952 billion will be spent, according to Gartner. Smartphones are one device that are being used more frequently in enterprises.

Gartner says, “the smartphone market has become polarised between the high- and low-end market price points. On one hand, growth in premium phones with an average selling price of $478 was dominated by iOS.”

“At the other end of the spectrum, growth in Android and other open OS phones is in the basic phone segment, where in 2014 the average phone cost less than $100. As a result, the market opportunity is becoming increasingly limited for midrange smartphones,” Gartner says.

Data centre systems spending is also estimated to increase significantly, reaching $143 billion in 2015, a 1.8% increase from 2014.

Enterprise communications applications and network equipment segments of the market have grown since the previous quarter, and growth for servers and external controller-based storage segments has decreased, says Gartner.

Gartner says, “These growth fluctuations are due to extensions in replacement life cycles and a higher than previously anticipated switch to cloud-based services.”

In the enterprise software market, spending is expected to total $335 billion, a 5.5% increase from 2014.

Price erosion and vendor consolidation is said to take place in 2015, due to fierce competition between cloud and on-premises software providers, according to Gartner.

In the customer relationship management (CRM) market, prices for areas such as sales force automation (SFA) are expected to decline by 25% through 2018.

Gartner says one way on-premises vendors can maintain their customer base is by discounting their cloud offerings.

Other areas such as database management system (DBMS) and application infrastructure and middleware will also have increased price competition, but not as noticeably as CRM, says Gartner.

IT services in 2015 are expected to reach 2.5% growth, down from the 4.1% growth forecast in the previous quarter. Gartner says reductions to software support services will contribute to the lower growth rates.

In order to reach these conclusions Gartner says they analysed sales by thousands of vendors across ranges of IT products and services, focusing on spending across hardware, software, IT services and telecommunications.

Gartner says their Worldwide IT Spending Forecast is a primary indicator of major technology trends and has been used for over a decade to recognise market opportunities and challenges, and base critical decisions on proven methodologies rather than guessworks.

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