Advanced Computing in the Age of AI | Tuesday, July 23, 2024

Enterprise Software Fuels Bullish IT Forecast 

Global IT spending is projected to jump 3.2 percent this year, led by a big increase in enterprise software, while an expanding cloud infrastructure is helping to drive datacenter systems spending to $143 billion.

Overall, Gartner estimates that global spending for devices, datacenters and enterprise software along with IT and telecommunications services will hit $3.8 trillion in 2014. Spending on enterprise software was forecast to lead the way this year with 6.9 percent year-on-year jump to a robust $320 billion.

"Businesses are shaking off their malaise and returning to spending on IT to support the growth of their business," Richard Gordon, Gartner's managing vice president, said in a statement.

Citing a "nexus of forces" driven by the convergence of cloud computing, mobile, social media and IT, Gartner reported that software segments such as database management systems, data integration and quality tools along with customer relationship management are thriving.

As more IT products and services mature and shift to commodity pricing, including cloud services, Gartner found that "product pricing is becoming the primary differentiator."

The 2014 growth rate forecast for IT spending represents a sizable jump over the previous year. In 2013, overall spending grew a modest 0.4 percent. Spending in several categories like datacenter systems, devices, and telecom services registered net declines last year, according to Gartner statistics.

The market watcher said virtualization and cloud adoption were generating "significant market traction" for Ethernet switches in datacenters. Datacenter spending is forecast to rise 2.3 percent year-on-year.

Other IT categories covered in the 2014 forecast include devices (up 4.4 percent to $689 billion), IT services (4.6 percent increase to $964 billion) and telecommunications services (1.3 percent increase to $1.65 trillion).

Overall, Gartner's optimistic forecast provides additional evidence that information technology is accounting for a growing share of global sales while fueling economic growth and higher productivity. As cheaper products and services like cloud computing become more ubiquitous, it appears the global spending spree could be sustainable for several more years.

"Consumers will be purchasing many new devices in 2014," added Gordon. "However, there is a greater substitution toward lower cost and more basic devices than we have seen in prior years."

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).