IoT, automation projects drive rise in IT spending

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Worldwide IT spending will rise to $3.5 trillion in 2017, a 2.4 percent increase from 2016, according to industry researcher Gartner.

"Digital business is having a profound effect on the way business is done and how it is supported," says John-David Lovelock, a vice president and distinguished analyst at Gartner. “Next-generation offerings will drive new categories of spending and include industry-specific disruptive technologies, such as the Internet of Things (IoT) in manufacturing, blockchain in financial services and smart machines in retail."

Per the Gartner spending forecast, the strongest growth will occur in the worldwide enterprise software market, which will rise 7.6 percent this year, up from 5.3 percent in 2016. The Gartner analysts attributed this to a more urgent need to automate and release new applications and functionality, as software applications allow more organizations to derive revenue from digital business channels.

"With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management (ITOM) tools that are delivered from the cloud," says Lovelock. "These cloud-based tools allow infrastructure and operations organizations to add functionality more rapidly and adopt newer technologies to help them manage faster application release cycles. If the I&O team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions."

Mobile also driving sales

While IT spending increased in 2016, only two of the top 10 IT vendors posted organic revenue growth. Given that revenues remain tied to the convergence of social, mobile, cloud and information technologies, Gartner predicts that some of the top 10 will fare better in 2017 due to strength of mobile phone sales.

Worldwide spending on devices, including PCs, tablets, ultramobiles and mobile phones, is projected to grow 3.8 percent in 2017 and reach $654 billion. Last year, expenditures on devices dropped by 2.4%. Gartner says that increased mobile phone revenues will be driven by higher average selling prices for premium phones in mature markets due to the 10th anniversary of the iPhone, as well as the increased mix of basic phones over utility phones. However, the tablet market continues to decline, as buyers take longer to replace their current models.

Gartner's quarterly IT spending forecasts are compiled by analyzing sales from thousands of vendors across the spectrum of IT products and services. The researcher says it uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market-size data on which to base its projections.

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