Global IT spending will reach $2.9tn in 2016 as firms invest in new technologies such as cloud tools and analytics software, according to Forrester.
The research firm's annual Global Tech Market Outlook report breaks down this spending as shown in the pie chart below:
The report notes that growth will increase in 2017, by 4.7 percent on 2016. The strong dollar is hiding the true extent of this improvement, but if the strength of the dollar wanes this growth rate could increase.
Overall the US will remain the largest tech market, accounting for over $1tn of the overall spend and seeing growth of 5.1 percent in 2016. However, other nations such as India, Mexico, Sweden, China and Israel will grow fastest, at a rate of around six percent.
Nations such as Canada, Australia, South Korea, and most European countries, will grow more slowly, Forrester said, while Japan, Brazil and South Africa will barely grow at all. Russia’s technology spending could even shrink.
The area of biggest growth over 2015 is predicted to come in cloud and analytics software, ranging from CRM and HR systems to financial management and data insights.
Forrester analyst and report author Andrew Bartels said that spending on cloud software could even start to rival traditional software by 2017 given the extent of its uptake.
“SaaS subscription revenues for applications will come close to equalling combined software licence and maintenance revenues by 2017,” he said, adding that spending on business intelligence (BI) will also increase.
“CIOs and their business leaders will also spend heavily on analytics in the form of BI apps, cognitive solutions and analytics-embedded applications.”
Bartels also noted that the predictions for increased spending of 4.5 percent and 4.7 percent for 2016 and 2017 respectively could end up being too positive or too negative depending on certain outcomes, and he erred on the side of optimism in his final assessment.
"There are risks that a renewed recession in Europe and/or Japan, or miscalculation by the US Federal Reserve in its monetary tightening, could cause actual tech market growth to be lower than our forecasts," he said.
"However, the more likely alternative to our tech market forecast would be better than expected growth should Europe’s and China’s economies post stronger growth and if the launch of Microsoft 10 turns out to be more successful in restoring growth to the PC market than its recent predecessors have been."
Microsoft has just announced that Windows 10 is now in use on over 200 million machines, and the rate of use rose over Christmas as new devices were activated, so it certainly appears that the new OS is helping to boost PC and laptop sales.
Only 35 per cent of IT decision makers regularly review their data formats
One-third of CIOs admit that their organisation has fallen victim to a security breach in the last two years
CIOs warn that companies are losing battle against cyber crime
Government hasn't revealed number of SMBs that have signed up to G-Cloud 9
More fingers of blame pointed at gangs linked to North Korean government