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IT Spending: Strong Dollar and Increased Cloud Adoption Slash Spending Forecast Again
Gartner slashed their forecast for IT spending in 2017 for the second time in 3 months. In October 2016, Gartner estimated IT growth in 2017 would be 2.9 percent. In January, citing political uncertainties, the growth estimate was revised downward to 2.7 percent. Now, Gartner is slashing the forecast for growth even more. The estimate for 2017 IT growth now is for only 1.4 percent growth.
But the estimate for 2017 is still much better than the results from 2016 and 2015 which were both down years. In 2015, spending declined by 5.5 percent, and in 2016, IT spending declined .6 percent. The IT market includes hardware, software, IT services and telecom.
Two of the reasons Gartner cited for the recent downward revision include a stronger US dollar and a shift into cost-saving IT technologies, like cloud computing.
John-David Lovelock, research vice president at Gartner, said that “we are seeing a shift in who is buying servers and who they are buying them from. Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment.”
