Big data analytics spend rises as firms cosy up to customers

Summary:New figures suggest a spike in spending on customer relationship management is being driven by a corporate focus on big-data analytics.

Big data analytics is helping lift spending on enterprise software, as more businesses invest in tools to give them a better handle on customer habits.

According to calculations from analyst firm Gartner, spending on customer relationship management is one the biggest areas of growth in enterprise software and is helping offset changes in spending patterns caused by a shift to software as a service.

"What we're seeing is the impact of the social trend — big-data analytics, that kind of thing — on investment, in that companies are trying to understand customers better and trying to be more interactive with customers, trying to manage multi-channel strategies. So we're seeing a big spike in investment in that area," said Gartner managing vice president Richard Gordon.

Overall spending on enterprise software is due to grow by 6.4 percent this year to $304bn compared with 2012, and by 6.6 percent next year.

Spending on SaaS is having an impact on the traditional enterprise software investment patterns, which tend to be relatively resilient to economic cycles because they are mostly made up from ongoing maintenance and upgrades.

"In some sectors we are seeing a shift towards SaaS, which tends to reduce the new licence revenue and moves it to a subscription model. So that tends to spread the spending out a bit and you don't get the upfront investment," Gordon said.

"That changes the type of spending and I guess you could argue that in some sectors it has a dampening effect on spending, as SaaS products are potentially cheaper over the long run. But in other areas there is increased investment, so it evens out."

Gordon said one of the downsides in enterprise software is the growth slowdown in spending on operating systems, which he described as collateral damage from the decline in the PC market.

"The key thing [in enterprise software] is really the SaaS trend and also the social, big data and mobile, which are starting to influence strategic investment decisions," he said.

Worldwide spending across all IT categories will reach $3.7 trillion in 2013, a two percent year-on-year increase, according to Gartner. Although the analyst has revised down the growth figure from 4.1 percent , it said this change mainly reflected recent fluctuations in US dollar exchange rates rather than an underlying decline.

According to Gordon, the IT market is still waiting for global economic conditions to improve.

"We're still treading water a little bit. We're not going to see a real strength in IT investment until we get a clearer picture of economic recovery particularly in the US, where we're starting to see some signs of that," he said.

"But there are some problems potentially out there with the likes of China and these kinds of economies — there is still a lot of economic uncertainty."

  2012 spend 2012 growth 2013 spend 2013 growth 2014 spend 2014  growth
Devices $676bn 10.9% $695bn 2.8% $740bn 6.5%
Datacentre systems $140bn

1.8%

$143bn 2.1% $149bn 4.1%
Enterprise software $285bn 4.7% $304bn 6.4%

$324bn

6.6%
IT sevices $906bn 2% $926bn 2.2% $968bn 4.6%
Telecoms services $1,641bn -0.7% $1,655bn 0.9% $1,694bn

2.3%

Overall IT spend $3,648bn 2.5% $3,723bn 2.0% $3,875bn 4.1%

Worldwide IT spending. Source: Gartner

Topics: Enterprise Software, Big Data, Cloud

About

Toby Wolpe is a senior reporter at ZDNet in London. He started in technology journalism when the Apple II was state of the art.

Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.