The recently volatile IT market will improve in the second half of 2014.
That’s according to IDC’s latest report, which says that business confidence is growing as global economies, for the most part, improve.
Worldwide IT spending is now forecast to increase by 4.5 percent in 2014 at constant currency, or 4.1 percent in U.S. dollars. Smartphone adoption is still driving a significant portion of the growth, IDC said. Aside from smartphones, the strongest growth will come from software, including rapidly expanding markets such as data analytics, data management, and collaborative applications including enterprise social networks. Big data, social, mobile and cloud will continue to drive virtually all of the growth in IT spending.
Some IT market segments performed weaker than expected in the first quarter of 2014 due to weather-related slowdowns in the U.S. and the impact of the conflict in Ukraine. In particular, an overdue enterprise infrastructure refresh cycle was disrupted by short-term declines in business confidence; however, strong underlying demand for this investment cycle will drive improvements in the server, storage, and network infrastructure markets in the coming months, IDC said.
"At the beginning of 2014, we asserted that businesses would choose to fix the roof while the sun was shining," said Stephen Minton, VP in IDC’s Global Technology & Industry Research Organization (GTIRO). "Unfortunately, the weather was literally much colder than expected during the first quarter. The good news is that the U.S. economic outlook has already brightened and this will drive a period of moderate but long-awaited investment in mission-critical infrastructure over the next year. However, accelerating adoption of cloud services will continue to impact sales of traditional on-premises equipment, packaged software, and IT services. This capital spending cycle will be mild by historical standards."
One real bright spot is in the PC market. The commercial PC refresh has proven stronger than originally forecast. As a result, IDC now forecasts PC spending will increase by 3.5 percent in 2014 (the fastest pace since the post-financial crisis rebound of 2010). Western Europe has also seen an improvement in PC shipments, although PC spending in Europe will still be down by 1 percent due to average price declines. The PC cycle has already driven a market upturn in Japan, where economic growth and upcoming tax increases drove a surge in capital spending in 2013 (PC spending in Japan increased by 6 percent last year, but will decline by les than 4.5 percent this year).
"The end of support for Windows XP is obviously part of the story, but there has also been a transition of some spending from tablets to PCs as consumers and businesses have allocated disposable income and IT budget to replacing older notebooks and desktops rather than upgrading their relatively new tablets," said Minton.
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July 17 2018 @ 16:45:08 UTC