This month, two major analyst firms – Gartner and Forrester – released reports looking at the state of IT spending gobally. TechCrunch combed through the reports and pulled out some interesting tidbits.
Overall, IT spending is continuing to grow, albeit at a slower rate than in the past. Gartner, which released its report in early July, said that global IT spending this year is on track to reach $3.7 trillion (up 2% from last year) and could climb to $3.9 trillion in 2014, as reported by TechCruch. In a report released by Forrester in mid-July, the analyst firm predicts that global IT spending will reach $2.06 trillion this year (according to TechCrunch). Note: Neither of these reports take consumer spending into account.
Despite the projected spending differences, both firms seem to agree that the development and sale of software and the growth of mobile devices are two of the fastest growing sectors of IT spending.
According to Garnter, Enterprise Software is the fastest growing category overall. Last year it accounted for $285 billion. This year it’s predicted to hit $304 billion and increase to $324 billion next year. From TechCrunch:
Enterprise software remains one of the smaller categories but growing the strongest: $304 billion will be spent on enterprise this year, a rise of 6.4%. IT services and data centers will each grow only around 2%.
Similarly, software accounted for the biggest piece of the pie in Forrester’s report – coming in at $542 billion (the next highest was computer equipment at $404 billion). Within the software category, applications are the main driving factor, pulling in $234.6 billion. From TechCrunch:
“Software is where most of the big changes in technology are taking place,” writes Bartels. That is to say, while legacy, on-premise investments are “languishing,” those that focus on cloud-based implementations such as SaaS; and “smart computing” in the form of big data analytics and mobile apps are booming — following trends we’ve seen for a while now. Overall, software investments are set to grow 3.3% this year and 6.2% in 2014 — growth rates that he concedes “may not seem impressive [but still] stronger than any other tech category.”
Another rapidly growing area of IT spend is mobile hardware. Gartner reported that spending on traditional PCs is slowing drastically but the sale of mobile devices is driving the “Device” category up. Spending on devices grew 10.9% in 2012. Things slowed down this year, with growth only at 2.8%, but it is expected to pick up again with projections for 2014 sitting at 6.5%. When you look at just mobile devices the numbers get more impressive.
Last week, Gartner noted that although PCs are still the second-largest category of IT devices, shipments of these are dropping fast, while those for mobile phones and tablets continue to climb. In all, there will be 2.4 billion devices shipped in 2013, up 6% on last year, Gartner said.
Today, the analysts spell that out in revenue numbers that tablet revenue will grow by a mammoth 38.9% and mobile devices by 9.3%; but in PCs, “while new devices are set to hit the market in the second half of 2013, they will fail to compensate for the underlying weakness of the traditional PC market,” Gartner notes.
When it comes to device spend in Forrester’s report, PCs still account for the largest portion – $134.2 billion of the overall $404 billion spent on “computer equipment.” Tablets only account for $21.1 billion, but spend on tablets is increasing while spend on PCs is slowing to a crawl.
Traditional PCs, Bartels writes, will see “just a 3% rise, despite the launch of Windows 8 operating system.” So what’s growing? Tablets, and specifically the iPad. Forrester projects that sales of tablets to business and government will go up by 36% this year to $21 billion.
The takeaway from these reports is that it’s a good time to be a software developer and tester! Focusing on creating quality software for enterprises and governments (the focus on these analyst reports) could prove to be lucrative in the coming years, so don’t only focus on the consumer side of things. It’s also vital for development companies to dedicate time to tablets. PCs will likely never go away, but if you can get the jump on creating killer enterprise apps optimized for tablets you’ll be ahead of the growing trends.
You can read more about the Gartner report and Forrester report on TechCrunch.