|By Business Wire||
|May 16, 2014 08:31 AM EDT||
According to the just released International Data Corporation (IDC) Worldwide Black Book (Doc #248617), worldwide IT spending will increase by 4.1% in constant currency this year, down from IDC's previous forecast of 4.6% and also down from last year's growth of 4.5%. According to the new Black Book, IT spending has been volatile since the beginning of the year, with macroeconomic wild cards including the crisis in Ukraine and the slowdown in China adding to the general sense of uncertainty, which continues to impact business confidence and investment.
- ClicktoTweet: @IDC Lowers #ITSpending Forecasts Due to #EmergingMarkets and #Mobile Device Slowdown - only increase by 4.1% in constant currency this year
Pent-up demand should, however, drive a more positive capital spending cycle in the second half of this year. In mature economies, organizations will take advantage of a more stable business climate to replace aging infrastructure including servers, storage, and network equipment. In some emerging markets, stabilization of the economy after the slowdown that began in mid-2013 could drive a period of catch-up spending, especially in China where IT spending has cooled significantly over the past 12 months.
Mobile Device Slowdown and Exchange Rates Will Drive IT Spending Growth Lower, While Cloud Continues to Disrupt Traditional IT Budgets
Aside from macroeconomic wild cards, the other weak spot in the IT market since the previous quarter has been slowing growth in mobile devices (smartphones and tablets), due partly to price erosion and a more mature installed base. IDC has lowered its forecast for total IT spending growth this year from 4.6% to 4.1% in constant currency, primarily as a result of downward revisions to mobile device forecasts. Based on average exchange rates from Q1 2014, this will translate into US dollar growth of just 3.4% as currency volatility continues to negatively impact US-based IT vendors. In 2013, the IT market increased by 4.5% in constant currency but just 2.5% in US dollars. Excluding mobile phones, growth in 2014 will accelerate slightly from 2.9% to 3.1% (constant currency) due to the expected pickup in infrastructure investment and the related downstream effect on IT services revenues.
"As smartphone growth continues to cool from the phenomenal expansion of the past few years, tablet shipments have performed weaker than expected over the past couple of quarters," said Stephen Minton, Vice President in IDC's Global Technology & Industry Research Organization (GTIRO). "This volatility, coupled with the macroeconomic uncertainty in many emerging markets, is somewhat masking a more positive underlying foundation for enterprise IT spending, with firms continuing to invest in working off that pent-up demand to replace old servers, storage, and network gear. Some of that spending is also driving IT services, despite the fact that an increasing number of businesses are moving more of their traditional IT budget to the Cloud."
Around 10% of software spending will have moved to the Cloud by the end of 2014, while Infrastructure as a Service (IaaS) will represent 15% of all spending on servers and storage. While this is creating significant disruption for IT vendors targeting traditional IT budgets, it is also driving equally significant short-term opportunities for those vendors that successfully capture mindshare for their Cloud-based solutions. Meanwhile, both Cloud and traditional spending will be driven by the underlying pent-up demand for server and storage capacity, driven in turn by the previous, explosive growth of mobile devices that are now generating an ever-increasing volume of data. The opportunity to extract value from this data is driving strong demand for analytics tools and Big Data solutions. Many organizations will choose a gradual approach for their journey to the Cloud, with security, reliability and regulatory factors in mind, implementing hybrid and private cloud solutions. As a result, both Cloud and traditional IT spending will benefit from these drivers in the next 2-3 years.
Positive Momentum in Most Mature Economies
Western Europe will post growth of 2% in constant currency terms as most countries continue to shake off the debt crisis and return to a more stable business climate. Similarly, business confidence is gradually improving in the US, after the sequester and government shutdown of last year. Server and storage spending will rebound to positive growth after last year's slowdown, while IT services growth will accelerate to more than 2%. In Canada, IT spending growth will accelerate from 3.3% last year to 5% in 2014, due to stronger spending on PCs, servers, and storage. Japan is a different story; the pent-up demand was largely worked off in 2013, when the government's deflation-busting policies boosted business confidence and when IT buyers moved to take advantage of lower prices before new taxes came into effect at the beginning of 2014. As a result, IT spending in Japan increased by 3.4% last year, but will decline by 1% in 2014.
"Over the past year, most of the surprises on the upside have come from mature markets," said Minton. "Japan had a strong year in 2013, and a similar pattern is expected this year in North America and Western Europe. We still expect that businesses will choose to fix the roof while the sun is shining in the second half of 2014, as part of a general infrastructure investment cycle."
Emerging Markets are Volatile, Downside Risks Have Increased
Emerging markets are more volatile, with macroeconomic forecasts having been lowered since January. In Central & Eastern Europe, the crisis in Ukraine has added to the sense of business uncertainty, and IDC now expects IT spending in Russia to decline by almost -1% this year after a similar decline in 2013. The slowdown in Russia will inevitably continue to have an impact on other countries in the region, although the recovery in exports to Western Europe is a positive factor. Inflation remains problematic in many emerging markets, including Latin America, India, Indonesia, and Turkey.
China remains a wild card. On the one hand, there is significant pent-up demand for IT spending after the slowdown of 2013. On the other hand, some economists are now forecasting that GDP growth could dip below 7% in 2014 and 2015. A hard landing in the real estate sector could yet derail the expected short-term recovery in IT spending, if businesses choose to once again delay their capital spending upgrade and expansion plans. Assuming the economy remains relatively stable, the pent-up demand will drive IT spending growth back to 10% in 2014, before another likely slowdown in 2015.
"China still has a lot of room for growth, and the slowdown in tech spending last year means that a period of catch-up is inevitable," added Minton. "As long as the economy remains fairly stable in the rest of 2014, the market should perform better than last year, although growth will likely cool again after that pent-up demand has been dealt with."
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.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
Oct. 27, 2016 10:15 AM EDT Reads: 1,394
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
Oct. 27, 2016 10:15 AM EDT Reads: 3,194
Intelligent machines are here. Robots, self-driving cars, drones, bots and many IoT devices are becoming smarter with Machine Learning. In her session at @ThingsExpo, Sudha Jamthe, CEO of IoTDisruptions.com, will discuss the next wave of business disruption at the junction of IoT and AI, impacting many industries and set to change our lives, work and world as we know it.
Oct. 27, 2016 10:02 AM EDT
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Oct. 27, 2016 09:15 AM EDT Reads: 2,154
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Oct. 27, 2016 08:45 AM EDT Reads: 11,584
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, 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. Meanwhile, 94% of enterpri...
Oct. 27, 2016 07:00 AM EDT Reads: 5,018
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
Oct. 27, 2016 07:00 AM EDT Reads: 4,935
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
Oct. 27, 2016 06:45 AM EDT Reads: 1,092
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Oct. 27, 2016 06:45 AM EDT Reads: 1,064
Cloud based infrastructure deployment is becoming more and more appealing to customers, from Fortune 500 companies to SMEs due to its pay-as-you-go model. Enterprise storage vendors are able to reach out to these customers by integrating in cloud based deployments; this needs adaptability and interoperability of the products confirming to cloud standards such as OpenStack, CloudStack, or Azure. As compared to off the shelf commodity storage, enterprise storages by its reliability, high-availabil...
Oct. 27, 2016 05:45 AM EDT Reads: 1,270
The IoT industry is now at a crossroads, between the fast-paced innovation of technologies and the pending mass adoption by global enterprises. The complexity of combining rapidly evolving technologies and the need to establish practices for market acceleration pose a strong challenge to global enterprises as well as IoT vendors. In his session at @ThingsExpo, Clark Smith, senior product manager for Numerex, will discuss how Numerex, as an experienced, established IoT provider, has embraced a ...
Oct. 27, 2016 05:30 AM EDT Reads: 1,216
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Oct. 27, 2016 04:45 AM EDT Reads: 2,885
Donna Yasay, President of HomeGrid Forum, today discussed with a panel of technology peers how certification programs are at the forefront of interoperability, and the answer for vendors looking to keep up with today's growing industry for smart home innovation. "To ensure multi-vendor interoperability, accredited industry certification programs should be used for every product to provide credibility and quality assurance for retail and carrier based customers looking to add ever increasing num...
Oct. 27, 2016 04:00 AM EDT Reads: 783
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, will discuss how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team a...
Oct. 27, 2016 03:45 AM EDT Reads: 773
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
Oct. 27, 2016 03:45 AM EDT Reads: 1,115
“Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CloudBerry Backup is a leading cross-platform cloud backup and disaster recovery solution integrated with major public cloud services, such as Amazon Web Services, Microsoft Azure and Google Cloud Platform.
Oct. 27, 2016 03:45 AM EDT Reads: 1,514
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
Oct. 27, 2016 03:30 AM EDT Reads: 3,863
What are the successful IoT innovations from emerging markets? What are the unique challenges and opportunities from these markets? How did the constraints in connectivity among others lead to groundbreaking insights? In her session at @ThingsExpo, Carmen Feliciano, a Principal at AMDG, will answer all these questions and share how you can apply IoT best practices and frameworks from the emerging markets to your own business.
Oct. 27, 2016 03:00 AM EDT Reads: 2,702
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Oct. 27, 2016 02:45 AM EDT Reads: 1,600
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
Oct. 27, 2016 02:15 AM EDT Reads: 1,141