Worldwide IT spending to fall

cashIT spending worldwide will amount to $3.5 trillion this year, but that’s a 5.5 percent decline compared to last year.

And it’s all down to the rising US dollar. If the situation is viewed in “constant currency” terms there would have been a rise in IT spending of 2.5 percent. But we and the IT vendors live in the real world and there’s no such thing as a constant currency.

Gartner analyst John-David Lovelock is keen to stress that “this is not a market crash”. He said that the decline is a chimera caused by big swings in the US dollar versus other currencies.

“There are secondary effects to the rising US dollar,” he said. “Vendors have to raise prices to protect costs and margins of their products” and that will lead commercial companies and individuals to decide whether to buy kit or not.

Gartner segments IT spending into six: devices, data centre systems, enterprise software, IT services, and communications services. Of these the biggest decline is in communication services, it predicts, with a decline of 7.2 percent this year.

Lovelock said that prices of PCs have risen by 10 percent or so in “currency impacted countries”. He said that there are large socks of PCs in Western Europe that need to be cleared. That will delay Windows 10 inventory in the second half of this year.