Gartner's IT Spending Forecast Trends for 2015
January 21, 2015 10:05 AM
Introduction
Worldwide IT spending is on pace to total $3.8 trillion in 2015, a 2.4 percent increase from 2014; however, that growth rate is down from earlier projections of 3.9 percent, according to the latest Gartner Inc. forecast. Heres a look at 10 IT spending trends for 2015, and the potential implications for CIOs, chief data officers their data team experts. Images: iStock
1. Smartphone Market Goes High and Low
Sales of PCs, smartphones, tablets and other devices will grow 5.1 percent in 2015, Gartner says. Meanwhile, the smartphone market is shifting to high- and low-end extremes. At the high end, Apple iOS dominates premium phones with an average selling price of $478. At the low end, Android and other open OS phones dominate where the average phone cost is less than $100, Gartner says. For CIOs managing BYOD allowances, it might be time to introduce tiered allowances that somehow balance the equation between expensive and low-cost smartphone purchases. For chief data officers, take a closer look at the types of apps higher-end smartphone buyers tend to run vs. low-end smartphone buyers. The data may reveal new clues on how to build and target your own corporate apps. Images: iStock
2. Data Center System Sales: Part I
Data center systems spending will grow 1.8 percent to $143 billion in 2015, Gartner forecasts. Growth for the enterprise communications applications and enterprise network equipment segments of the market have been increased from the previous quarter's forecast. For CIOs still building on-premises data centers, the shift to converged infrastructure (servers, storage, networking) for those enterprise applications appears to be accelerating. For chief data officers, converged data centers also provides the opportunity to converge and eliminate your data silos. Images: iStock
4. Enterprise Software
In the enterprise software market, spending is on pace to total $335 billion, a 5.5 percent increase from 2014, Gartner predicts. More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers, the company added. For CIOs, that means its time to negotiate hard with your software providers many of whom are worried about losing your business in its entirety to cloud alternatives. Images: iStock
4. Enterprise Software
In the enterprise software market, spending is on pace to total $335 billion, a 5.5 percent increase from 2014, Gartner predicts. More price erosion and vendor consolidation is expected in 2015 because of fierce competition between cloud and on-premises software providers, the company added. For CIOs, that means its time to negotiate hard with your software providers many of whom are worried about losing your business in its entirety to cloud alternatives. Images: iStock
5. CRM Price Wars
In the customer relationship management (CRM) market, seat prices for segments such as sales force automation (SFA) are expected to decline by 25 percent through 2018, Gartner predicts. Whats driving the price war? The answer involves incumbent on-premises vendors discounting their cloud offerings heavily to try and maintain their customer base vs. cloud rivals, Gartner says. For CIOs, this is a prime opportunity to sit down with chief revenue officers and chief marketing officers, to truly determine your long-term CRM and sales automation strategies and negotiate with providers from there. Chief data officers should also be at the table ensuring that all application choices align with corporate-wide data discovery, retention and management goals. Images: iStock
6. Expanded Price Wars
There will also be increased price competition from cloud offerings in other areas. Gartner points to potential price wars involving database software, application infrastructure and middleware. For CIOs, it sounds like the classic on-premises middleware business is shifting to the cloud, where businesses increasingly need APIs and tools to integrate multiple third-party SaaS offerings. For chief data officers, this is a prime opportunity to help your CIO to eliminate data islands. Images: iStock
7. Slowing IT Services Growth
IT services revenues will grow about 2.5 percent in 2015down from an earlier 4.1 percent growth forecast, Gartner says. As customers shift from on-premises software to cloud applications, revenue from related support services will slow through 2018, the researcher said. For CIOs, youre gaining faster time to market and lower ongoing maintenance challenges --- from cloud applications, assuming you select the right ones. For chief data officers, reducing your reliance on IT service providers could free up budget for more data analysts. Images: iStock
8. Telecom Outlook
Telecom services spending will grow only about 0.7 percent in 2015, Gartner forecasts though thats stronger than last year, when revenues actually declined 0.1 percent. Despite the growth some of the news is mixed for providers. As smartphone penetration plateaus across some markets, watch for mobile voice revenue across several European markets to face challenges, Gartner predicts. For CIOs, take a closer look at rolling up regional telecom services into global spending and management plans. And for chief data officers, this is a prime opportunity to study data retention laws and compliance mandates from region to region. Images: iStock
9. Year over Year Comparisons
Overall, Gartners IT spending forecast for 2015 is mixed to good vs. actual growth in 2014. Devices (5.1 percent growth for 2015) should be stronger than 2014 (up 3.8 percent). Data center systems also should have a stronger year (up 1.8 percent 2015 vs. 0.8 in 2014). But enterprise software (up 5.5 percent in 2015) will have a slightly weaker showing than 2014 (5.8 percent) as cloud services accelerate. IT services (up 2.5 percent 2015) also will be weaker than 2014 (up 2.7 percent). Telecom (up 0.7 percent in 2015) will be much stronger than 2014 (down 0.1 percent), Gartner forecast. In each case, CIOs and data managers should have more leverage while negotiating contract terms with technology providers. Likewise, chief data officers should gain the opportunity to build one version of the truth across all of your data pools. Images: iStock
10. Thank You And More Info
Special thanks to Gartner for the research information. For CIO and chief data officer implications, Insurance Networking News has added its views throughout this slideshow. To track Gartners forecasts, visit < target="_blank" href="http://www.gartner.com/technology/research/it-spending-forecast/">here. And for more Information Management slide shows, visit our gallery archive. Images: iStock