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Uncertainties surrounding the prospects for an upturn in global economic growth remain the major retardants of IT growth. This uncertainty has engendered the pessimistic business and consumer sentiment in evidence throughout much of the world. However, much of this uncertainty is nearing resolution and as it does, we look for accelerated spending growth in 2013. Indeed, we have revised 2013 growth upward from 3.8% to 4.2%, although much of this results from projected gains in the value of foreign currencies versus the dollar. When measured in constant dollars, 2013 spending growth is forecast to be only 3.9%.

We have, however, lowered our expectations for 2012 dollar-valued IT spending growth from 1.7% to 1.2%. This overall decrease reflects a large reduction in the devices forecast of $27.5 billion, which is only marginally offset by relatively small upward revisions in the IT services and telecom services forecasts. Currency continued to have a significant effect on our expectations this quarter; absent projected gains in the value of foreign currencies versus the dollar through the end of 2012, expected 2012 dollar-valued IT spending growth would have been just 0.6%.

Beyond 2013, our forecast for spending growth remains largely unchanged. Growth is expected to average a compound annual rate of 3.9% from 2013 through 2106. Long-term increases in the mobile phones and IT services forecasts counterbalance long-term reductions in the PC and tablets forecasts. Forecast growth in constant dollars over the same period is exactly the same, since it is our policy not to project future currency movements.

• Gartner's forecast for 2013 IT spending growth in U.S. dollars has been increased from 3.8% in the previous quarter to 4.2% this quarter. However, growth in constant U.S. dollars is forecast at 3.9% for 2013, down from 4.7% the previous quarter.
• Overall forecast spending on devices has been reduced, with growth from 2012 through 2016 now expected to average 4.5% annually in current U.S. dollars (down from 6.4%) and 5.1% annually in constant dollars (down from 7.4%). These reductions reflect a sharp reduction in the forecast growth in spending on PCs and tablets that is only partially offset by marginal increases in forecast growth in spending on mobile phones and printers. The decline in forecast growth in spending on PCs and tablets comes, in part, from a slight decline in expected device unit shipments but, more significantly, to an even sharper shift in volume toward tablets and away from PCs than in our previous forecast. The tablet market has seen greater price competition from android devices, as well as smaller, low-priced devices in emerging markets. It is ultimately this shift toward relatively lower-priced tablets that lowers our average selling prices forecast for 2012 through 2016, which, in turn, is responsible for retarding both device spending growth in general, and PC and tablet spending growth in particular.
• Data center systems are forecast to grow from 2011 through 2016 at a compound annual growth rate (CAGR) of 3.9%, down from 4.4%, to reach $167 million in 2016. EMEA in general and Western Europe in particular saw the brunt of the downward revisions, with the EMEA outlook falling from 3.2% to 1.8% compound growth, as companies further extend life cycles and scale back investments in reaction to economic conditions. Japan remained the weakest region in growth terms; however, the outlook continues to improve. All segments have been cut back, with storage again seeing the largest downward revision — from a compound growth rate of 9.0% down to 7.9%. Networking saw the smallest revision, with a forecast outlook almost unchanged from the previous quarter.
• Through 2016, the enterprise software market is expected to average a 6.0% CAGR over the forecast period, reaching $360 billion, which is unchanged from the previous forecast update. In the near-term, the sector will be driven by key markets such as security, storage management and CRM; however beginning in 2014, markets aligned to "big data" and other information management initiatives, such as enterprise content management, data integration tools, and data quality tools will begin to see increased levels of investment.
• The IT services market is expected to reach just over $1 trillion by 2016, growing at a 4.5% average CAGR from 2011 through 2016. The outlook for consulting, implementation and business process outsourcing has been reduced slightly in all years, while overall market size and growth rates for IT outsourcing have been increased as a result of new research that provides colocation and hosting market segments within IT outsourcing.
• The telecom services market will remain roughly flat over the forecast period, with declining spending on voice services counterbalanced by strong growth in spending on mobile data services. By 2016, we forecast that mobile data will represent 33% of the total telecom services market, up from 22% in 2012

For spending by sector, worldwide, 2010 through 2016, see Table 1. For IT spending growth by sector, worldwide, 2012 and 2013 (4Q12 vs. 3Q12), see Table 2.

Source: Gartner (January 2013)

Source: Gartner (January 2013)

Note: As shown in Table 1, Gartner has changed the way that it presents its aggregated IT spending forecast data to better reflect the reality of technology markets. None of the underlying market definitions have changed, but the roll-ups are now presented as follows:

• Devices: PCs and tablets, mobile phones, printer
• Data center systems: Servers, external controller-based storage, enterprise networking infrastructure, enterprise communications applications
• Enterprise software: enterprise application software, infrastructure software
• IT services: Business IT services, IT product support
• Telecom services: Mobile voice services, mobile data services, fixed voice services, fixed data services

Further details can be found in "Gartner Market Databook, 4Q12 Update."

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"Gartner Market Databook, 4Q12 Update"