Digital Efforts Drive IT Spend to $3.7 Trillion in 2018

Growth

By: R. Scott Raynovich

At its Gartner Symposium/ITexpo in Orlando this week, analyst firm Gartner said that worldwide IT spending will increase 4.3 percent annually to reach $3.7 trillion in 2018, driven by communications services and business software designed to modernize enterprises in an effort known as digital transformation. 

The 3.7 trillion represents a 4.3 percent increase from projected 2017 levels, according to Gartner. Enterprise software and IT services show strong growth, with communications services driving the majority of spending. Software spending is projected to grow 8.5 percent in 2017, followed by 9.4 percent in 2018 to total $387 billion. IT services spending is showing 4 percent growth in 2017 to reach $931 billion, and it is slated to increase 5.3 percent in 2018 to reach $980 billion. Data center spending is relatively sluggish, projected to grow 1.8 percent in 2018 to $176 billion. 

The devices segment is showing growth of 5.3 percent in 2017 and 5 percent in 2018. The introduction of the iPhone 8 and 10 will raise the average selling price of premium smartphones, said Gartner. While the PC market remains relatively flat, it will get a bump from businesses replacing their machines with Windows 10 PCs. 

Gartner has said there are 10 markets within these segments that represent the most dynamic portion of the IT market. These ten markets including three cloud segments: Infrastructure as a service (IaaS), integrated platform as a service (iPaaS), and communications platform as a service (cPaaS). Other important technologies include digital workplace, such as collaboration, workforce analytics, and video tools, to security (endpoint detection and response), analytics (smart data discovery) and storage (in-memory data grids). Growth in all of these segments will be driven by the major efforts of companies in digital transformation. 

"The IT buying landscape is changing: Digital business transformation is an effort to create connected, platforms and new industry revenue streams," said John-David Lovelock, research vice president at Gartner. "Organizations that are not creating new digital business models or new ways to engage constituents or customers, are falling behind. Those vendors that do not move more quickly than their clients, will be left behind." 

Gartner's says its IT spending forecast methodology comes from the analysis of sales by thousands of vendors across the entire range of IT products and services. 

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