World information technology spending unlikely to grow in 2016

“The current forecast assumes that the UK would not exit the European Union. With the UK’s exit, there will likely be an erosion in business confidence and price increases which will impact the UK, Western Europe and worldwide IT spending,” Gartner Research Vice President John-David Lovelock said.

While the UK has embarked on a process to change, that change is yet to be defined. The “leave” vote will quickly affect IT spending in the UK and in Europe, while other changes will take longer. Staff may be the largest immediate issue.

The long-term uncertainty in work status will make the UK less attractive to new foreign workers. Retaining current non-UK staff and having less access to qualified new hires from abroad will impair UK IT Departments. “2016 marked the start of an amazing dichotomy. The pace of change in IT will never again be as slow as it is now, but global IT spending growth is best described as lacklustre,” Lovelock said.

2016 is the year that will see business focus turning to digital business, the Internet of Things and even algorithmic business, he added. 

“To fund these new initiatives, many businesses are turning to cost optimisation efforts centering around the new digital alternatives to save money, simplify operations and speed time to value. It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent,” Lovelock said. 

Data centre systems’ spending is projected to reach USD 174 billion in 2016, a 2 per cent increase from 2015, driven by strong growth in Greater China and Western Europe and a strong refresh cycle in North American enterprise network equipment market.

Global enterprise software spending is on pace to total USD 332 billion, a 5.8 per cent increase from 2015 with North America being the dominant regional driving force behind the growth, Gartner said. Devices spending is projected to total USD 627 billion by the end of 2016.

The lacklustre economic issues surrounding Russia, Japan and Brazil will hold back demand and worldwide PC recovery in 2016, Gartner said. Additionally, Windows 10 upgrades have further led to PC buying being delayed consumers are willing to use older PCs longer, once they are upgraded to Windows 10, it added.

Spending in the IT services market is expected to increase 3.7 per cent to total USD 898 billion. Japan is the fastest-growing region for IT services spending with 8.9 per cent growth. Communications services spending is projected to total USD 1.38 trillion in 2016, down 1.4 per cent from 2015.

“Japan leads the growth in communications services, with 8.3 per cent growth, while Greater China adds the most dollars to spend with just more than USD 8.3 billion,” Gartner said. Eastern Europe, Western Europe and North America are forecast to decrease as price wars and declining usage affect virtually all communications services markets, it added. 

Meanwhile, aiming to promote digital payments in line with Prime Minister Narendra Modi’s call, Confederation of All India Traders (CAIT) on Thursday said it will kick-start a 40-day campaign from Friday.

 CAIT will organise seminars, conferences, round-tables and workshops in different states, emphasising the need of adoption of electronic payments as mode of payment among trading community, according to a release issued here.

Beside traders, CAIT is also planning to rope in farmers, transporters, SMEs, hawkers, consumers, self employed groups, women entrepreneur and other sections in the campaign. Yesterday, Finance Minister Arun Jaitley after releasing CAIT’s less cash campaign road map in Delhi said more usage of digital payments will bring more transparency and accountability and will lead to further growth in GDP and economy.

He had said, black money is a plague, which needs to be weeded out from the system, calling on people to avail the scheme of the government for voluntary disclosure.

“We are committed to pursue our vision for promotion of less cash system in trade and commerce, which will enable India to see double-digit growth, it is critical for its largest community of self-employed, small and medium business owners to adopt and use modern means of technology,” CAIT Secretary General Praveen Khandelwal said.

There are about 5.77 crore small businesses in the country and the promotion of less cash campaign will not only includes allowing consumers the convenience of paying through electronic means that is credit or debit cards and wallets, but also critical investments in promoting businesses online, he said.

However, he said, the government should make specified rules and regulation for e-commerce business in the country and must bring a policy to provide incentives like tax benefits to encouraging people to use electronic payments, CAIT National President B C Bhartia said.