Gartner Predicts Return to Growth for Some IT Market Sectors in 2017

Gartner’s 2017 Worldwide IT Spending Forecast predicts that some industry sectors that struggled in 2016 will at least stabilize or even return to growth during the new year.

Data center systems generated $170 billion in revenue in 2016, a decline of 0.6 percent compared to 2015. However, Gartner predicts that the market segment will grow to $175 billion in 2017, a 2.6 percent jump. In 2018, data center systems spending will rise to $176 billion.

Enterprise software posted the strongest year-over-year growth in 2016 with an estimated $333 billion in sales—a 5.9 percent growth rate. It’ll hold on to the top growth crown in 2017 with year-over-year revenue growth of 6.8 percent and total revenue of $355 billion. Spending in 2018 on enterprise software will be up 7 percent to $380 billion.

The devices segment, which includes hardware like tablets and smartphones, tumbled 8.9 percent to $588 billion in 2016. However, Gartner predicts that the segment will stabilize in 2017 and post $589 billion in revenue. But looking ahead to 2018, however, Gartner expects spending remain flat at $589 billion.

According to Gartner, mobile devices like smartphones, tablets and notebook PCs, will experience flat spending in the next two years. However, the research firm believes the IT side will experience a replacement cycle in 2018 that will boost PC sales that year. Emerging markets could also help the devices segment as people around the world look to get new smartphones in 2017 and 2018.

Like software, IT services had a strong growth in 2016 with revenue by 3.9 percent to $899 billion. In 2017, growth will jump to 4.2 percent and spending to $938 billion. Best of all for companies in that sector is that total IT services spending will grow by 4.7 percent in 2018 to nearly $1 trillion.

Google, Microsoft, and Amazon are one of the main reasons the global server industry will do well in 2017, according to Gartner. In fact, global server revenues will grow by 5.6 percent based on the companies’ data center investments. However, an expected decline of 3 percent in external controller-based storage will only allow the aforementioned data center systems segment to grow by 2.6 percent this year.

Gartner noted that companies have very different views on how to spend money on IT services in 2017. Due to uncertainty in the global business and political climate, some companies are investing heavily in IT this year to take advantage of perceived opportunities while others are holding back for fear of a downturn. Without this uncertainty, Gartner says IT industry could have a much better 2017.

The communications industry is still the biggest IT segment, generating $1.38 trillion in 2016, alone. In 2017, it’ll continue to be the biggest segment with $1.41 trillion in revenue, a 1.7 percent year-over-year growth rate. In 2018, Gartner believes the communications services industry revenue will grow to $1.43 trillion.

All signs right now are pointing to a strong 2017 for the broader IT industry. Gartner predicts that total IT industry spending will reach $3.46 trillion in 2017, growing 2.7 percent compared to 2016, when spending was down 0.6 percent to $3.38 trillion.

If 2017 is a good year, 2018 might be even better. Gartner predicts that 2018 IT spending will hit $3.55 trillion, a 2.6 percent growth rate compared to 2017. Still, as Gartner notes, many things can happen and all of its predictions are subject to change.