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Social, Analytics and Smartphones Driving IT Spending Growth

While smartphones remain the top dogs in IT spending, the research firm IDC reports analytics, collaborative applications and data management will help drive stronger spending through the end of 2014.

The firm forecasts worldwide IT growth of 4.1 percent in US dollars. It notes that without smartphones, the number would be just 2.8 percent (in US dollars).

"Aside from smartphones, the strongest growth will come from software, including rapidly expanding markets such as data analytics, data management and collaborative applications including enterprise social networks," the firm noted.

Weather Impact

The Framingham, Mass.-based company wrote that the first half of 2014 came up short of its expectations "in line with the weather-related slowdown in the US and the impact of wild card events, including the conflict in Ukraine."

It also cited a short-term decline in business confident for disrupting what it called an "overdue enterprise infrastructure refresh cycle." However, it said strong pent-up demand will drive buying in the server, storage and network infrastructure markets.

"At the beginning of 2014, we asserted that businesses would choose to fix the roof while the sun was shining," Stephen Minton, vice president of IDC's Global Technology and Industry Research Organization, said in a statement. "Unfortunately, the weather was literally much colder than expected during the first quarter."

Minton said, however, that the economic outlook "has already brightened" in the US and predicted that would drive "a period of moderate but long-awaited investment" in key infrastructure over the next year.

Minton cautioned that quickening adoption of cloud services  was likely to hold back sales of on-premise equipment, packaged software and IT services. "This capital spending cycle will be mild by historical standards," he said.

In a curious turn, IDC  said the PC refresh cycle is stronger than expected, with a 3.5 percent spending increase expected this year — the fastest pace since the economic rebound started in 2010.

"The end of support for Windows XP is obviously part of the story, but there has also been a transition of some spending from tablets to PCs as consumers and businesses have allocated disposable income and IT budget to replacing older notebooks and desktops rather than upgrading their relatively new tablets," said Minton.

He added there's "plenty of growth ahead for tablets, however, and it would be premature to say that improvements in the consumer PC market represent anything like a reversal of the long-term shift to tablets and hybrids over the long term."

 
 
 
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