Worldwide IT spending is on pace to total $3.8 trillion in 2015, a 2.4 percent increase from 2014, according to Gartner. However, this growth rate is down from earlier projections of 3.9 percent. The slower outlook for 2015 is largely attributed to the rising U.S. dollar, as well as a modest reduction in growth expectations for devices, IT services and telecom services. "The change in forecast is less dramatic than it might at first seem. The rising U.S. dollar is chiefly responsible for the change — in constant currency terms the downward revision is only 0.1 percent," says John-David Lovelock, research vice president at Gartner. "Stripping out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.7 percent, which compares with 3.8 percent in the previous quarter's forecast."
The U.S. dollar spending growth rate on devices (including PCs, ultra mobiles, mobile phones, tablets and printers) for 2015 was decreased by 1.3 percentage points to 5.1 percent. The smartphone market is becoming polarized between the high- and low-end market price points. On one hand, growth in premium phones with an average selling price of $478 in 2014 was dominated by iOS. At the other end of the spectrum, growth in Android and other open OS phones is in the basic phone segment, where in 2014 the average phone cost less than $100. As a result, the market opportunity is becoming increasingly limited for mid range smartphones.
Data center systems spending is projected to reach $143 billion in 2015, a 1.8 percent increase from 2014. Growth for the enterprise communications applications and enterprise network equipment segments of the market have been increased from the previous quarter's forecast, while growth for the servers and external controller-based storage segments has been lowered. These growth fluctuations are due to extensions in replacement life cycles and a higher than previously anticipated switch to cloud-based services.
In the enterprise software market, spending is on pace to total $335 billion, a 5.5 percent increase from 2014. More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers. In particular, in the customer relationship management (CRM) market, a key cloud battleground, seat prices for segments such as sales force automation (SFA) are expected to decline by 25 percent through 2018. This will be caused by incumbent on-premises vendors discounting their cloud offerings heavily to try and maintain their customer base. There will also be increased price competition from cloud offerings in other areas (such as database management system (DBMS) and application infrastructure and middleware, albeit at a somewhat slower and weaker pace than for CRM.
The outlook for IT services in 2015 has been reduced to 2.5 percent growth, down from the 4.1 percent growth forecast in the previous quarter. Globally, reductions to software support services contributed disproportionately to a lower outlook through 2018, because of lower growth rates expected for enterprise software. Regionally, short-term growth rates were lowered slightly in Russia and Brazil, due to declining economic conditions and political uncertainty in both countries.
Telecom services spending is projected to grow 0.7 percent in 2015, with spending reaching $1,638 trillion. A multitude of factors have affected each national market — some positive, others negative — with the primary driver for growth being a reduction in expectations for mobile voice revenue across several markets in Western and Eastern Europe (such as Austria and Italy) as a consequence of the declining growth of new devices sold in the region over the forecast period.