Global IT revenue took a downturn in 2016, but this year Gartner analysts had expected to see the market rebound to a growth rate of around 2.7 percent. However, Gartner's latest forecast cuts that rate forecast in half, as more enterprise customers flock to the cloud and the rising US dollar challenges foreign exports.
Gartner now pegs global spending for 2017 at $3.46 trillion, representing a modest 1.4 percent increase over the previous year.
Enterprises are moving away from buying servers from the traditional vendors and instead renting server power from companies such as Amazon and Microsoft, Gartner said. The shift has prompted a reduction in spending on servers, which is impacting the overall datacenter systems segment and in turn reducing overall global IT spending.
Meanwhile, the enterprise software segment remains strong, with Gartner projecting annual spending to rise 5.5 percent to $351 billion -- more than double the expected spending for data center systems. Gartner said the increase in enterprise software spend reflects the shift to virtualization of servers, storage, networking, and other datacenter functions.
Gartner expects communications services to drop 0.3 percent to $1.37 trillion, only to bounce back in 2018 with a 1.3 percent rise to $1.39 trillion. The IT device market, which includes mobile phones and tablets alongside PCs and printers, will grow 1.7 percent in 2017 to $645 billion globally, according to the report.
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