‘Falling dollar’ means communications spend will rise to $3.6tn

Alan Burkitt-Gray
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Gartner report says spending on communications services will rise 0.3% this year, but only because foreign currencies are worth more in dollar terms

Gartner forecast

Overall IT spending will go up in 2018, says Gartner, and spending on one of the sectors – communications services – will also go up, but more slowly.

The analyst company predicts that overall spending will go up in 2017 by 2.4% and next year by 3.5%, to hit along $3.6 trillion next year.

Spending on communications services will rise 0.3% this year and 1.6% next year, adds Gartner. In 2018 the spending on communications services will reach $1.4 trillion – over a third of the overall IT budget.

But while the news is good after flat growth or decline last year, the numbers are not all what they seem, admits Gartner. “The growth rate is up … due to the US dollar decline against many foreign currencies,” the company says.

John-David Lovelock, Gartner vice president and distinguished analyst, said “digital business is having a profound effect on the way business is done and how it is supported”.

He added: “The impact of digital business is giving rise to new categories; for example, the convergence of ‘software plus services plus intellectual property’. These next-generation offerings are fuelled by business and technology platforms that will be the driver for new categories of spending. Industry-specific disruptive technologies include the internet of things in manufacturing, blockchain in financial services (and other industries) and smart machines in retail. The focus is on how technology is disrupting and enabling business.”

Enterprise software is the fastest growing sector, at a forecast 7.6% this year and 8.6% next year, after 5.3% last year. The market for data centre systems will grow more slowly than communications services, only 0.3% this year and 1.2% next year, says Gartner.