Global IT spending is on pace to reach a total of $3.7 trillion in 2014, a 2.1% increase from last year but slower than earlier projections of 3.2% growth, according to the latest forecast by Gartner.
The slower outlook for 2014 is attributed to a reduction in growth expectations for devices, data center systems and to some extent IT services.
“Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short-term IT spending outlook,” said Richard Gordon, managing VP at Gartner.
“However, 2015 through 2018 will see a return to ‘normal’ spending growth levels as pricing and purchasing styles reach a new equilibrium,” said Gordon. “IT is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalization.”
Telecom services spending is projected to grow 0.7% this year, reaching $1.6 trillion, Gartner predicts. Voice ARPU will fall by about 10% annually through 2018 because of a decline in consumer use of voice services — particularly among prepaid users.
“Increased competition between communication services providers is leading to price competition,” said Gordon. “Emerging low-cost or free/advertisement-subsidized mobile data services and low-cost services from mobile virtual network operators that target less-lucrative segments are impacting ARPU more than initially expected."