Global tech market will grow by 4 percent in 2018, reaching $3 trillion

Forrester explores four major developments in the tech market for 2017 and 2018.

Global mobile device users will number 5.5 billion by 2022: Forrester

Forrester published its mid-year global tech market outlook for 2017 and 2018. In constant currencies, we project that global purchases of technology software, hardware, and services by businesses and governments will grow by 3.4 percent in 2017 and by 4 percent in 2018.

Software and tech consulting services spending will see the strongest growth, with spending in both categories increasing by around 4.3 percent in 2017 before accelerating to over 6 percent in 2018. Tech hardware is beginning to show some signs of life, with computer equipment increasing by 2.6 percent in 2017 and 3 percent in 2018, and communications equipment edging higher by 3.1 percent and 1.5 percent in 2017 and 2018, respectively. Spending on outsourcing and telecom services will see slower growth of around 2.2 percent in 2018 before falling to sub-2 percent rates in 2018.

Four major developments in the tech market define Forrester's latest global tech market forecast:

  1. Improving economies will drive the global tech market expansion. This year so far has seen a return to normality from the political and economic surprises that shook the markets in 2016, contributing to better economic growth. This relative stability will encourage businesses and governments to be more aggressive in their tech spending plans in 2018.
  2. Cloud will grow rapidly, but the related slowdown in spending on on-premises technology will dampen overall growth. Spending on cloud applications and cloud platform services will grow at double-digit rates. However, this growth is not additive, but instead cannibalizes spending on traditional software, hardware, and tech services. In categories like business applications, where cloud subscription revenues now exceed license revenues, growth will approach 10 percent in 2018. But in other categories like middleware software, systems integration services or tech outsourcing, cloud is not yet a large enough portion of overall spending to offset the single-digit growth in traditional categories.
  3. The US and six other countries will have tech market growth at or above 4 percent in 2017. China, India, Indonesia, South Korea, Sweden, Denmark, and the US are positioned to end this year with robust growth. Brazil and Russia will lag their peers as both countries emerge from recessions.
  4. Back-office technology will narrow the gap with business technology. Spending on CRM, eCommerce, customer analytics, and other technologies that help firms win serve, and retain customers -- what Forrester calls "business technology" (BT) -- will rise to 28 percent of total global tech spending, and will represent over half of new project spending. However, the growth in spending on the front-office systems of BT is starting to drive investments to change back-office technologies to support new systems, with the resulting growth starting to pick up in 2018.

Risks to economic growth remain in many countries, so businesses still need to operate with a certain amount of caution in their tech budgets and spending plans. But there are more reasons to be optimistic about business outlooks than was the case at the start of 2017.

To learn more about Forrester's updated global tech spending outlook, including insights on how businesses can prioritize tech spend in this improving environment, click here (subscription required).

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