Forrester downgrades 2014 global IT spending forecast, citing weak first half

But CIOs shouldn't shut their wallets just yet, according to analyst Andrew Bartels

Forrester has cut its worldwide IT spending forecast for this year, saying growth will be 3.3 per cent in US dollars, rather than 6.2 per cent. Total spending will be $US2.2 trillion.

The analyst firm blamed a weak first half for its downgrade, but said growth should pick up in the remainder of the year.

Advanced economies such as the US. and UK, which are part of what Forrester calls the Tech Twelve, "will be the locomotive that pulls the rest of the tech train," vice president and principal analyst Andrew Bartels wrote in a report released Wednesday. Smaller tech markets such as Latin America will have higher relative growth rates than the U.S., but not the same appetite to try out new technologies, he added.

Tech products and services focused on customer processes will see the strongest growth this year, rising 9.6 per cent to $US297 billion, and there are valid reasons for this outcome, according to the report.

"With increased pressures to respond to new customer demands and expectations rippling through the advanced economies, firms will emphasize investments in customer-process technologies, especially CRM [customer-relationship-management] and marketing automation SaaS [software-as-a-service] apps, mobile applications, and analytics and big data for identifying ways to win, serve, and retain customers," Bartels wrote.

That said, nearly 50 per cent of spending on customer-process technologies will occur in the US, he added.

Technology focused on employee processes, which include business applications, PCs, tablets, smartphones and related consulting services, will rise 2.3 per cent globally to $US1 trillion.

Spending on IT infrastructure is now set to tick up 2.5 per cent this year to $US917 billion, according to Forrester.

The report's conclusions should be viewed in the proper context by IT buyers, according to the report.

"CIOs may interpret the lowering of our tech market growth forecast as a signal to slow their own tech spending," Bartels wrote. "That would be a mistake. In most countries, the bulk of the slowdown in growth has already occurred in the first half of 2014."

There should be enough of an uptick in growth now "to be able to invest in new projects and initiatives based on smart and mobile technologies in the second half while taking advantage of vendors' willingness to cut good deals because of their poor first-half performance."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags serviceshardware systemsCIO roleit strategysoftwareForrester Researchindustry verticalsIT management

Struggling for Christmas presents this year? Check out our Christmas Gift Guide for some top tech suggestions and more.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?