Worldwide IT spending is projected to total $3.8 trillion in 2014, a 3.1 percent increase from 2013 spending of $3.7 trillion, according to the latest forecast by IT research firm Gartner.
Enterprise software spending growth continues to be the strongest throughout the forecast period, with the 2014 annual growth rate expected to grow 6.8 percent.
While spending on devices, including PCs, ultramobiles, mobile phones and tablets, contracted 1.2 percent in 2013, Gartner projects it will grow 4.3 percent in 2014.
Last quarter, Gartner's forecast for 2014 IT spending growth in U.S. dollars was 3.6 percent, a 0.5 percentage point reduction from the current forecast. The Gartner Worldwide IT Spending Forecast is an overall indicator of major technology trends across the hardware, software, IT services and telecom markets.
"Investment is coming from exploiting analytics to make B2C processes more efficient and improve customer marketing efforts. Investment will also be aligned to B2B analytics, particularly in the SCM space, where annual spending is expected to grow 10.6 percent in 2014," Richard Gordon, managing vice president at Gartner, said in a statement. "The focus is on enhancing the customer experience throughout the presales, sales and post sales processes."
In addition, Gartner slightly revised downward the IT services compound annual growth rate between 2012 and 2017. The largest contributor to this revision comes from reductions in IT outsourcing—specifically, in colocation, hosting and data center outsourcing growth rates.
"We are seeing CIOs increasingly reconsidering data center build-out and instead planning faster-than-expected moves to cloud computing. Despite these small reductions, we continue to anticipate consistent four to five percent annual growth through 2017," Gordon continued.
Gartner analysts said convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, would take place as differentiation will soon be based primarily on price instead of devices' orientation to specific tasks.
Thanks to a reduction in the forecast for external controller-based storage and enterprise communications applications, Gartner cut the data center systems spending growth outlook for 2014 to 2.6 percent from 2.9 percent.
"A downward revision of the 2014 forecast growth in spending for telecom services—a segment that accounts for more than 40 percent of total IT spending—from 1.9 percent to 1.2 percent is the main reason behind this overall IT spending growth reduction," Gordon continued. "A number of factors are involved, including the faster-than-expected growth of wireless-only households, declining voice rates in China and a more frugal usage pattern among European customers."
Gordon noted the latter coincides in Western Europe with a breakout of fierce price competition among communications service providers to retain customers and attract new ones.