FRAMINGHAM, Mass.--(BUSINESS WIRE)--
According to the newly published International Data Corporation (IDC)
Black Book (Doc #250222), recent volatility will gradually give way
to a more positive outlook for IT spending in the second half of 2014.
With the U.S. and other mature economies mostly heading in the right
direction and a significant commercial PC refresh cycle already
underway, improvements in business confidence are set to drive a
moderate infrastructure upgrade cycle over the next 12-18 months, while
investments in software and services will continue to accelerate.
According to @IDC #WorldwideITMarket showing signs of improvement -
spending forecast to increase by 4.5% at constant currency 2014
Worldwide IT spending is now forecast to increase by 4.5% in 2014 at
constant currency, or 4.1% in U.S. dollars. A significant proportion of
this growth is still being driven by smartphones – IT spending excluding
mobile phones will increase by just 3.1% this year in constant currency
(2.8% in U.S. dollars). Aside from smartphones, the strongest growth
will come from software, including rapidly expanding markets such as
data analytics, data management, and collaborative applications
including enterprise social networks. The 3rd platform pillars of Big
Data, Social, Mobile and Cloud will continue to drive virtually all of
the growth in IT spending, while spending on 2nd pPlatform technologies
will remain effectively flat.
Meanwhile, although some emerging markets remain constrained by
macroeconomic and geopolitical wild cards, there is now significant
pent-up demand for IT investment that will drive stronger growth next
year in markets including India, Brazil, and Russia. Pent-up demand has
already driven a significant rebound in both consumer and enterprise IT
spending in China this year, as confidence stabilizes. While mature
economies are still driving the upside in 2014, emerging markets will
once again dominate in 2015.
Cold Snap and Wild Cards Impacted IT Spending, But Underlying
Demand is Strong
Some IT market segments performed weaker than expected in the first
quarter of 2014 (1Q14), in line with the weather-related slowdown in
U.S. output and the impact of wild card events including the conflict in
Ukraine. In particular, an overdue enterprise infrastructure refresh
cycle was disrupted by short-term declines in business confidence.
However, strong underlying demand for this investment cycle will drive
improvements in the server, storage, and network infrastructure markets
in the coming months.
"At the beginning of 2014, we asserted that businesses would choose to
fix the roof while the sun was shining," said Stephen
Minton, Vice President in IDC's Global Technology & Industry
Research Organization (GTIRO). "Unfortunately, the weather was literally
much colder than expected during the first quarter. The good news is
that the U.S. economic outlook has already brightened and this will
drive a period of moderate but long-awaited investment in
mission-critical infrastructure over the next year. However,
accelerating adoption of cloud services will continue to impact sales of
traditional on-premise equipment, packaged software, and IT services.
This capital spending cycle will be mild by historical standards."
PC Refresh Stronger than Expected in Mature Economies, Tablet
The commercial PC refresh has proven stronger than originally forecast.
As a result, IDC now forecasts PC spending will increase by 3.5% in 2014
(the fastest pace since the post-financial crisis rebound of 2010).
Western Europe has also seen an improvement in PC shipments, although PC
spending in Europe will still be down by 1% due to average price
declines. The PC cycle has already driven a market upturn in Japan,
where economic growth and upcoming tax increases drove a surge in
capital spending in 2013 (PC spending in Japan increased by 6% last
year, but will decline by -4.5% this year).
"The end of support for Windows XP is obviously part of the story, but
there has also been a transition of some spending from tablets to PCs as
consumers and businesses have allocated disposable income and IT budget
to replacing older notebooks and desktops rather than upgrading their
relatively new tablets," said Minton. "The tablet market is also more
sensitive to economic wild cards and price competition, now that
penetration rates have increased. There's still plenty of growth ahead
for tablets, however, and it would be premature to say that improvements
in the consumer PC market represent anything like a reversal of the
long-term shift to tablets and hybrids over the long term."
The U.S. tablet market is now forecast to increase by just 2% this year,
but will rebound to 7% growth in 2015 as the PC cycle begins to wane.
Worldwide tablet spending has slowed from 29% year-over-year growth last
year to 8% in 2014, but will accelerate back to double-digit growth next
year (10%). Penetration rates in emerging markets such as China will
continue to increase, while some enterprise spending will shift back to
Pent-Up Demand and Mobile Driving Growth in China, With Other
Emerging Markets to Follow
The economic slowdown in 2013 had a negative impact on IT spending in
China, but this also created a significant swell of pent-up demand that
is now driving improvements in technology investment. IT spending growth
in China decelerated to 8% last year but is on course for 13% growth in
constant currency in 2014.
According to Minton, "Smartphones are a large factor in China's growth
as Chinese manufacturers have successfully expanded the customer base
with new, price-competitive products that have driven overall volume.
But while smartphones are a big part of the story, there has also been a
significant upturn in business spending on infrastructure and software."
Excluding mobile phones, IT spending in China will increase by 5% this
year (up from growth of just 2%, excluding phones, in 2013). Server
spending in China will increase by 7% (compared to 0% in 2013), storage
spending by 8% (up from 1.5% in 2013), and software by 9% (up from 7%
last year), but overall market growth is still weighed down by the
declining PC market.
Other emerging markets are likely to improve over the next 12 months as
business confidence stabilizes. IT spending in India will increase by
15% next year, up from 8% in 2014. In Brazil, the market will accelerate
from 10% growth this year to 13% next year. In Russia, where the crisis
in Ukraine has damaged business and investor confidence since the
beginning of the year, the market is set to decline slightly in 2014
before rebounding to 7% growth in 2015.
Mature economies have remained more stable since last year, with market
growth often outpacing expectations. The U.S. IT market will increase by
4% this year, and Western Europe will maintain a 2% growth rate overall.
Total worldwide IT spending will reach almost $2.1 trillion in 2014.
Including telecommunications services, the worldwide ICT market will
increase by 4% to $3.7 trillion, with telecom services growth of 4%
driven by mobile data services and increasing broadband penetration.
Black Book provides forecasts for IT spending in 54 countries around
the world. IT spending forecasts focus on 25 individual market segments
across hardware, software, IT services, and telecom services for
individual countries in all regions including North America, Latin
America, Western Europe, Eastern Europe, Asia/Pacific, the Middle East,
and Africa. The Worldwide Black Book Query Tool presents all data in the
following exchange rate views: U.S. dollars in constant currency, annual
and year-to-date exchange rates, and local currency.
Additional products in this category include the Worldwide
Enterprise Black Book, which analyses annual IT spending in relation
to four company size segments based on employee counts. The Worldwide
Black Book, Premium Edition, includes cloud spending forecasts,
quarterly IT spending forecasts by region, IT vendor market share
analysis, macroeconomic indicators, IT/Internet penetration, and CIO
survey data. The United
States Black Book: State IT Spending by Vertical Market is a
quarterly analysis of the status and projected growth of the IT industry
in 50 states and across 15 vertical markets.
For additional information about this research or to arrange a
one-on-one briefing with Stephen
Minton, please contact Sarah Murray at 781-378-2674 or firstname.lastname@example.org.
Reports are available to qualified members of the media. For information
on purchasing reports, contact email@example.com;
reporters should email firstname.lastname@example.org.
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. IDC helps IT professionals, business executives, and
the investment community to make fact-based decisions on technology
purchases and business strategy. More than 1,000 IDC analysts provide
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. In 2014, IDC celebrates
its 50th anniversary of providing strategic insights to help clients
achieve their key business objectives. IDC is a subsidiary of IDG,
the world's leading technology media, research, and events company. You
can learn more about IDC by visiting www.idc.com.
Mary Conroy, 508-935-6964
Director of Marketing
Sarah Murray, 781-378-2674
Source: International Data Corporation