|By Business Wire||
|August 5, 2014 12:20 PM EDT||
According to the newly published International Data Corporation (IDC) Worldwide 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.
- ClicktoTweet: 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 Shipments Weaker
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 tablets.
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.
IDC's Worldwide 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 [email protected]. Reports are available to qualified members of the media. For information on purchasing reports, contact [email protected]; reporters should email [email protected].
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.
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 20, 2017 03:00 PM EST Reads: 1,628
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Jan. 20, 2017 02:30 PM EST Reads: 1,101
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
Jan. 20, 2017 02:15 PM EST Reads: 545
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Jan. 20, 2017 01:30 PM EST Reads: 3,584
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
Jan. 20, 2017 01:30 PM EST Reads: 5,722
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Jan. 20, 2017 01:30 PM EST Reads: 5,223
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Jan. 20, 2017 01:00 PM EST Reads: 2,568
Discover top technologies and tools all under one roof at April 24–28, 2017, at the Westin San Diego in San Diego, CA. Explore the Mobile Dev + Test and IoT Dev + Test Expo and enjoy all of these unique opportunities: The latest solutions, technologies, and tools in mobile or IoT software development and testing. Meet one-on-one with representatives from some of today's most innovative organizations
Jan. 20, 2017 12:30 PM EST Reads: 1,643
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
Jan. 20, 2017 12:30 PM EST Reads: 3,181
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Jan. 20, 2017 12:30 PM EST Reads: 4,343
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 7-9, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and E...
Jan. 20, 2017 12:15 PM EST Reads: 5,828
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Jan. 20, 2017 11:30 AM EST Reads: 746
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
Jan. 20, 2017 10:45 AM EST Reads: 3,699
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.
Jan. 20, 2017 10:45 AM EST Reads: 6,083
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jan. 20, 2017 09:45 AM EST Reads: 5,509