Cloud Services Cannibalise Software And IT Services Spend
May 16, 2013
Grazed from BizTech2. Author: Editorial Staff.
According to the new International Data Corporation (IDC) Worldwide Black Book just released, IT spending was slightly below expectations in the second half of 2012 and first quarter of 2013.
Economic uncertainty surrounding the US government sequester, European debt crisis and weakening GDP in China has resulted in volatile spending patterns across most segments of the market, with many IT vendors reporting difficulty in closing deals at the end of Q1 2013. IDC now projects worldwide IT spending growth of 4.9 percent this year in constant currency, down from the previous forecast of 5.5 percent growth and representing a slowdown from the 5.6 percent growth recorded in 2012. As a result, IT spending will reach $2.06 trillion in 2013. Including telecom services, ICT spending will increase by 4.5 percent to $3.7 trillion.
The strength of the US dollar may continue to have an adverse impact on the reported revenues of US-based IT vendors. In 2012, IT spending increased by just 2.9 percent in US dollars, a significant downturn from 9.5 percent US dollar growth in 2011. Based on average exchange rates from Q1 2013, this year’s growth is on track to increase by 4.2 percent in US dollar terms…
Deteriorating PC Shipments
The reduction in IDC’s overall forecast for 2013 is largely driven by rapidly deteriorating PC shipments since the second half of 2012. According to the new report, IDC now expects PC spending to decline by 3 percent in constant currency this year, representing a third successive year of declining PC revenues. The shift to mobile devices remains a key driver for overall tech spending growth. Excluding mobile phones and tablets, worldwide IT spending increased by only 2.8 percent in 2012 and is forecast to grow by just 2.6 percent this year. Worldwide spending on smartphones will increase by 17 percent in 2013 while tablet spending will grow by 32 percent.The combined growth rate for PCs and tablets, meanwhile, will remain stable in the range of 4-5 percent…
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