Seeking Alpha

Gartner cuts IT spending view; enterprise software a strong point

  • "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," says Gartner's Richard Gordon.
  • Gartner now expects global IT spending to rise only 2.1% in 2014 to $3.75B. That's down from a prior forecast for 3.2% growth, albeit still better than the flat growth seen in 2013. For now, Gartner expects growth to accelerate to 3.7% in 2015.
  • Device sales (inc. PCs, mobile devices, and printers) are only expected to grow 1.2% in 2014, as PC sales continue declining and ASP drops affect smartphone/tablet revenue.
  • Data center hardware sales are expected to rise 0.4%, and IT services 3.8%. The cannibalizing impact of public cloud services is expected to continue taking a toll on both markets (previous).
  • Enterprise software sales are expected to be relatively healthy, growing 6.9% to $321B. Within the market, demand for databases and other types of infrastructure software is expected to hold up better than application demand, which has been dinged by weak PC sales and cloud competition.
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