Corporate departments outside of the IT department, globally, are forecast to spend $609bn in 2017:
A new update to the Worldwide Semiannual IT Spending Guide: Line of Business from the International Data Corporation (IDC) forecasts worldwide corporate IT spending funded by non-IT business units will reach $609 billion in 2017, an increase of 5.9% over 2016. The Spending Guide, which quantifies the purchasing power of line of business (LoB) technology buyers by providing a detailed examination of where the funding for a variety of IT purchases originates, also forecasts LoB spending to achieve a compound annual growth rate (CAGR) of 5.9% over the 2015-2020 forecast period. In comparison, technology spending by IT buyers is forecast to have a five-year CAGR of 2.3%. By 2020, IDC expects LoB technology spending to be nearly equal to that of the IT organization.
Meanwhile, all in, global IT spend was estimated at $2.4tn in 2016, but that includes telco and consumer tech. And, this demographic breakdown for enterprise IT spend:
In terms of company size, more than 45% of all IT spending worldwide will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4%.
Sources: Technology Purchases from Line of Business Budgets Forecast to Grow Faster Than Purchases Funded by the IT Organization, According to IDC, March 2017 and Worldwide IT Spending Forecast to Reach $2.7 Trillion in 2020 Led by Financial Services, Manufacturing, and Healthcare, According to IDC, Aug 2016.
The biz has also just signed a deal to spend $400m a year on Google’s cloud hosting over the next five years – that’s $2bn in total for the Gmail giant.
That’s an amazing chunk of spend for a hats on cats business. Hopefully, Ben Thompson’s theories that Snapchat is the new TV pan out.
There is a lot of uncertainty in the air,” said one consultant close to the Office of Management and Budget’s IT efficiency initiatives who asked not to be identified. “The whole IT industry and federal IT operations are in a wait-and-see holding pattern,” he said, anticipating official word on key federal IT initiatives and leadership positions.
In my amateur analysis of Trump’s effect on IT spend, it seems like there’s three options:
- More of the same with big contractors and vendors, just wrapped up in myths of change.
- Complete shut down of everything with respect to growth; they just stop spending and let government IT age.
- Start working with new government contractors and doing things differently; the “Space X” option.
Who knows what’ll happen?
Boeing and Lockheed were already worried about their costs long before the election. If I were the United Space Alliance, I would be even more terrified of the danger of losing government business now. And those of us in federal IT need to realize that our time may be around the corner.
As we discussed in the 2017 predictions show last month, the Trump adminstration is clearly not reliable in it’s agenda or principals for any reliable, let alone logical, predictions. Cutting spending in favor of “non-traditional” options, though, seems like something they’d goof into.
The big takeaway is that small increases in IT budgets are the new normal. Unlike previous recoveries, we have not seen a large jump in IT spending over the past five years. So if a CIO is only seeing a two or three percent increase this year, he or she should understand that is pretty much in line with other companies.
See more guidance charts on IT priorities, n=190.
$2.3T estimated for global IT spend in 2016, with the US seeing the most growth, 1% in Western Europe, and growth slowdowns in India and China.
Source: 2016: the year IT sales will go sdrawkcaB • The Register
“In addition, the government plans to increase PaaS spending from $227.1 million in FY15 to $231.3 million [in FY16].”
We’re still in a phase where categorization causes weird slices of spend like this, but there you have it. More figures on “cloud” spending in the piece.
Source: IDC: Federal government seeing cloud spending push