IT services spend to grow 2.3% this year, lower than 3.6% in 2016

BENGALURU: Global information technology (IT) services spend in 2017 is projected to grow 2.3% to $917 billion, estimates Gartner Inc, lower than its earlier estimate of 4.2% and the 3.6% growth recorded in 2016, on account of protectionist policies, especially in the US.

A lower IT services spend this year does not bode well for the country’s $150 billion software services sector which is already facing challenges posed by newer technologies, such as cloud computing and blockchain, making many companies alter the way they traditionally did business.

Worldwide IT spend in 2017 is projected to grow 1.4% to $3.46 trillion, down from Gartner’s earlier forecast of 2.7% on account of strength in the US dollar. Despite the revised guidance, overall IT spend globally will be 0.4% higher than last year.

“The modest changes to the IT services forecast this quarter can be characterised as adjustments to particular geographies as a result of potential changes of direction anticipated regarding U.S. policy — both foreign and domestic,” Gartner said in a press release on Monday.

“The strong US dollar has cut $67 billion out of our 2017 IT spending forecast,” said JohnDavid Lovelock, research vice president at Gartner. “We expect these currency headwinds to be a drag on earnings of U.S.-based multinational IT vendors through 2017.”