IT spending to hit $3.5 trillion in 2017

IT spending is set to hit $3.5 trillion in 2017 as companies continue to invest in software and IT services, forecasts suggest.

Tech analyst Gartner said worldwide IT spending will rise 2.9 per cent next year, from 2016 estimated spending of $3.4 trillion.

Firms’ spending on software and services is set to rise, with software spending set to grow 7.2 per cent in 2017 to reach $357 billion and IT services spending growing 4.8 per cent in 2017 to reach $943 billion.

Gartner presented its forecasts and discussed IT and business issues at the Symposium/ITxpo show. Brexit dominated the agenda, with attendees interested in looking at how the UK’s exit from the European Union will impact IT investment.

"The immediate impact of Brexit has caused modest growth in IT spending to turn negative for 2016," said John-David Lovelock, research vice president at Gartner.

"Without the UK, global IT spending growth would have been modestly positive at 0.2 per cent in 2016, but with the UK included, IT spending is expected to decrease 0.3 per cent. The immediate impact of the British pound will also cause the IT spending patterns to shift as prices for IT will increase."

Gartner expects some changes in IT investment to come about post-Brexit, with some European financial services firms putting more investment in IT to offer a “more viable option” for EU countries than the UK.

"We see software and IT services spending in Germany and France increasing, while U.K. services stay relatively flat," Mr. Lovelock said.

"There are other countries, such as the Netherlands, Luxembourg and Ireland that are also increasing their IT spend to contend as a viable alternative to banks in the U.K. We are seeing examples of many banks in talks with these countries to examine the possibility of moving their operations outside of the U.K."

Addressing the upcoming US presidential election, Gartner analysts said they did not forecast the outcome affecting IT spending trends.