Global information and communications technology (ICT) spending will increase by 3% this year to reach $3.5 trillion, a slight improvement from last years' 2% growth rate.
This is according to the latest Worldwide Black Book from International Data Corporation (IDC), a quarterly review of ICT spending in 89 countries, which found that ICT spending overall will increase by 3% this year. With economic uncertainty and volatility impacting business and consumer confidence, technology markets are in for a rocky ride, over the next 18 months, says IDC.
SA's ICT spending is expected to reach almost $24.2 billion this year, a mild improvement from last years' $23.3 billion. ICT spending in Rest of Africa is projected to reach $44.8 billion in 2017, a slight improvement from last years' $42.8 billion, reveals IDC.
"This is mainly due to improvements in emerging markets and a general pickup in infrastructure spending. IT spending (excluding telecommunications) will also grow by 3% this year," adds the research firm. "Last year's slow pace represented a significant slowdown from the 5-6% IT spending growth recorded from 2012-2015, and resulted from a slowdown in enterprise capital spending, weak consumer upgrades of PCs, phones, and tablets, and ongoing sluggishness in IT services."
According to the latest forecast by Gartner, worldwide IT spending is projected to total $3.5 trillion this year, a 2.7% increase from 2016.
"2017 was poised to be a rebound year in IT spending. Some major trends have converged, including cloud, blockchain, digital business and artificial intelligence. Normally, this would have pushed IT spending much higher than 2.7% growth," says John-David Lovelock, research vice president at Gartner. "However, some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments."
Cloud to dominate
IDC says cloud will continue to drive much of the ICT spending, as more businesses move to adopt cloud services. This will continue to drive aggressive hardware spending by cloud service providers although the next major upgrade cycle will not begin until later in 2017.
"The cloud has come to dominate the ICT market outlook in many ways," says Stephen Minton, program vice president in IDC' Customer Insights and Analysis group. "It drives capital spending cycles for hardware manufacturers and represents an increasing proportion of the customer base for server and storage vendors. From a software standpoint, software-as-a-service and platform-as-a-service already account for almost 20% of all software spending and rising, while cloud adoption is also driving increasing usage of telecom services and investment in network equipment. On the other hand, the cloud also continues to cannibalise from legacy 2nd Platform revenue streams, including traditional outsourcing services."
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