Attendees look at an iPad at the 2014 International CES in Las Vegas, Nevada. Justin Sullivan/Getty Images
Research firm Gartner has changed its forecast for the growth of information technology expenditure on a global scale — a reflection of a few key changes in consumer and enterprise tech trends that are leaving analysts a bit in the dark about how to make predictions that were once more foreseeable.
VISUAL CONTEXT: GLOBAL IT SPENDING
Source: Gartner, June 2014
Global spending on IT is expected to reach $3.7 trillion in 2014, up 2.1% from 2013 but below the firm’s earlier projections of 3.2% growth. A reduced expectation for device growth, data center systems and “to some extent IT services” are the root causes for this shift in overall growth, according to the firm. The New York Times quotes John-David Lovelock, research vice president at Gartner, on the firm’s trimmings:
“Frankly, it’s gotten extremely difficult. Things we looked at in 2009 or 2010 aren’t the things we’re seeing now. “
Changes in the market for particular devices — tablets mostly — are other contributors. The tablet market is reaching a saturation point of 50% in the U.S., marking a juncture at which lower-priced devices are going to become more popular. Gartner predicts that sales of high-end tablets will decrease, and the next generation of buyers will glom onto lower-priced “utility tablets”. This shift in consumer adoption coincides with IT department spending to combine for an overall drop-off in certain service equipment.
Richard Gordon, managing vice president at Gartner, published his thoughts on how IT’s advancement into a “third phase” of digitalization is affecting these forecasted changes in spending and structure:
Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook. However, 2015 through 2018 will see a return to ‘normal’ spending growth levels as pricing and purchasing styles reach a new equilibrium. IT is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalization.
Could this third phase have anything to do with the general shift in attitude towards cloud-based and virtual technologies? Edward Snowden’s NSA leaks sent a ripple through the cloud market last year, triggering a massive shift in how CIOs and businesses in general viewed the future of their storage and intelligence options. In a word: the NSA leaks injected a shot of distrust throughout the communities that were beginning to see cloud- and virtual-based services as viable foundations for their IT departments. While it may be years before research can demonstrate that the leaks have had an impact on the growth of IT, analysts have already begun to purport that change is afoot.
And even if cloud is not impacted so significantly as many believe it will be, a shift towards virtualization has a necessary impact on the progression of IT anyway. As cloud computing services grow, server shipments stave off. Changes in cloud have effects on IT departments. Spending levels have already begun to impact data center systems, as Gartner points out. The firm notes that the server market is showing signs of weakness “as enterprises migrate away from high-cost platforms toward lower-cost alternatives”. How these changes shake out over the next few years could mean more shaved predictions from industry experts, and a murky future for IT.
