All the latest UK technology news, reviews and analysis

Internet of Things is needed to stimulate IT investment, says Gartner

30 Jun 2014
Big data

Global IT spending for the past quarter is predicted to be down from 3.2 percent in the previous quarter to 2.1 percent, according to Gartner. In fact, spending is likely to remain flat in the near future until the rise of digital business takes effect, the analyst said.

Gartner's latest Worldwide IT Spending Forecast shows that IT spending remains flat, despite greater optimism that the economy is on the up in many regions. In part, this can be explained by price cutting in some arenas such as cloud services, while in other areas, lack of product differentiation is driving down the amount customers spend.

Gartner research vice president Richard Gordon told V3: "We're seeing, slightly faster than expected, a kind of commoditisation around IT, if you like, where there is more competition among the vendors, and there is a shift in buying power towards the buyers in areas like cloud-based products and services.

"There's a bit of a lack of differentiation if you look around at products, especially something simple like a smartphone. They're becoming much of a muchness, so there's also more of a competition around price here, and that's shifting pricing down, so a fall in spending isn't due to a lack of demand," he added.

Furthermore, Gartner predicts that this trend is likely to continue for the next few years, until we start to see spending rise back to previous levels with the emergence of what the firm refers to as digital business, which is expected to start to take effect in the period 2015 through 2018.

"IT has evolved over time from automation to an era where there has been a bit more sophistication about managing IT and sourcing, and we think we're now moving to a new era of digital business, which is more about the embedding of technology in products and services themselves, such as with the Internet of Things, which is going to stimulate a different type of technology investment going forwards," Gordon said.

Highlights of Gartner's report include a trend for the server market to show weakness as organisations migrate away from high-cost platforms towards lower-cost alternatives.

In the enterprise software market, database software is expected to have strong growth as adoption is driven by big data and digitalisation initiatives.

In Europe, the situation is particularly pronounced, with Western Europe showing a growth rate of -0.8 percent in overall spending, according to Gartner.

"Western Europe is still lagging behind other regions in the world, even lower than Japan, which has long been a low-growth economy," Gordon said. However, things may not be as bad as the bare figures may suggest, he added.

"If you look at the digital economy, it's not so much the technology itself, it's the economic value of the thing that it impacts. If you can make something like healthcare much more efficient through the use of technology, then you can strip a lot of the cost out, which is of huge economic value that doesn't necessarily show up in these spending figures," he said.

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
Daniel Robinson

Daniel Robinson is technology editor at V3, and has been working as a technology journalist for over two decades. Dan has served on a number of publications including PC Direct and enterprise news publication IT Week. Areas of coverage include desktops, laptops, smartphones, enterprise mobility, storage, networks, servers, microprocessors, virtualisation and cloud computing.

More on Hardware
What do you think?
blog comments powered by Disqus

Windows 10 poll

What are your first impressions of Windows 10?

Popular Threads

Powered by Disqus
V3 Sungard roundtable event - Cloud computing security reliability and scalability discussion

CIOs debate how to overhaul businesses for the digital era

V3 hosts roundtable with Sungard Availability Services

Updating your subscription status Loading

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button

Getting started with virtualisation

Virtualisation can help you reduce costs, improve application availability, and simplify IT
management. However, getting started can be challenging


Converting big data and analytics insights into results

Successful leaders are infusing analytics throughout their organisations to drive smarter decisions, enable faster actions and optimise outcomes

IT Support Analyst

IT Support Analyst Do you want a rewarding career...

Junior QA Test Engineer

This is a great opportunity to work for this award winning...

Test Analyst (Lichfield)

Test Analyst to work for a house-hold known Financial...

Test Analyst- York- National Organisation

Test Analyst- National Organisation Up to £30,000...
To send to more than one email address, simply separate each address with a comma.