Social, Analytics and Smartphones Driving IT Spending Growth

3 minute read
Tom Murphy avatar

While smartphones remain the top dogs in IT spending, the researchfirm IDC reports analytics, collaborative applications and data management willhelp 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, thenumber 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 andcollaborative applications including enterprise social networks," the firmnoted.

Weather Impact

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

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

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

Minton said, however, that the economic outlook "has alreadybrightened" in the US and predicted that would drive "a period ofmoderate but long-awaited investment" in key infrastructure over the nextyear.

Learning Opportunities

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

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

"The end of support for Windows XP is obviously part of the story, butthere has also been a transition of some spending from tablets to PCs asconsumers and businesses have allocated disposable income and IT budget toreplacing older notebooks and desktops rather than upgrading their relativelynew tablets," said Minton.

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

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