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IT spending growth to slow down in 2014

IT research firm Gartner has cut its forecast for global IT spending by about one-third for this year, blaming a tougher competitive environment and subsequent pressure on vendors to lower prices.

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DQW Bureau
New Update

IT research firm Gartner has cut its forecast for global IT spending by about one-third for this year, blaming a tougher competitive environment and subsequent pressure on vendors to lower prices.

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IT spending will grow 2.1% to $3.7 trillion in 2014, said Gartner. This is against an earlier forecast of 3.2%.

Gartner said the slower outlook for 2014 is due to a reduction in growth expectations for devices, data center systems and to some extent IT services.

"Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook," said Richard Gordon, managing vice president, Gartner.

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Gartner said IT is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalization.

"As tablet penetration reaches 50% in US households, sales of high-end tablets will decrease. New adopters are more attracted to lower priced utility tablets. The result is the mix of tablets shifting from basic tablets to utility tablets resulting in lower price points," Gartner said.

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