Gartner Says Worldwide IT Spending Forecast to Grow 2.7 Percent in 2017

Worldwide IT spending is projected to total $3.5 trillion in 2017, a 2.7 percent increase from 2016, according to Gartner, Inc. However, this growth rate is down from earlier projections of 3 percent.

“2017 was poised to be a rebound year in IT spending. Some major trends have converged, including cloud, blockchain, digital business and artificial intelligence. Normally, this would have pushed IT spending much higher than 2.7 percent growth,” said John-David Lovelock, research vice president at Gartner. “However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments.”

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

Worldwide devices spending (PCs, tablets, ultramobiles and mobile phones) is projected to remain flat in 2017 at $589 billion (see Table 1). A replacement cycle in the PC market and strong pricing and functionality of premium ultramobiles will help drive growth in 2018. Emerging markets will drive the replacement cycle for mobile phones as smartphones in these markets are used as a main computing device and replaced more regularly than in mature markets.

The worldwide IT services market is forecast to grow 4.2 percent in 2017. Buyer investments in digital business, intelligent automation, and services optimization and innovation continue to drive growth in the market, but buyer caution, fueled by broad economic challenges, remains a counter-balance to faster growth.

Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)

	2016 Spending	2016 Growth (%)	2017 Spending	2017 Growth (%)	2018 Spending	2018 Growth (%)
Data Center Systems	170	-0.6	175	2.6	176	1.0
Enterprise Software	333	5.9	355	6.8	380	7.0
Devices	588	-8.9	589	0.1	589	0.0
IT Services	899	3.9	938	4.2	981	4.7
Communications Services	1,384	-1.0	1,408	1.7	1,426	1.3
Overall IT	3,375	-0.6	3,464	2.7	3,553	2.6

Source: Gartner (January 2017)

“The range of spending growth from the high to low is much larger in 2017 than in past years. Normally, the economic environment causes some level of division, however, in 2017 this is compounded by the increased levels of uncertainty,” said Mr. Lovelock. “The result of that uncertainty is a division between individuals and corporations that will spend more — due to opportunities arising — and those that will retract or pause IT spending.”

For example, aggressive build-out of cloud computing platforms by companies such as Microsoft, Google and Amazon is pushing the global server forecast to reach 5.6 percent growth in 2017. This was revised up 3 percent from last quarter’s forecast and is sufficient growth to overcome the expected 3 percent decline in external controller-based storage and allow the data center systems segment to grow 2.6 percent in 2017.

More detailed analysis on the outlook for the IT industry will be presented in the complimentary webinar “IT Spending Forecast, 4Q16 Update: What Will Make Headlines in 2017” taking place January 17 at 11 a.m. ET. During the webinar, Gartner analysts will walk through the trends driving IT spending, such as digital business, blockchain, Internet of Things (IoT) and the progress from algorithms to machine learning to artificial intelligence, and examine shifts in spending patterns. Additional analysis can also be found in the Gartner Thinkcast “What 2016’s IT Spend Numbers Signal for 2017.”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available at “Gartner Worldwide Spending Forecast.” This Quarterly IT Spending Forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.