IT spending tanked worldwide last year

Worldwide IT spending fell nearly 6% last year -- the largest one-year decrease ever. But the U.S. bucked the trend, as spending rose 3.1%

IT spending tanked worldwide last year
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Worldwide IT spending fell nearly 6 percent last year -- the largest one-year decrease research firm Gartner says it has ever seen. The global forecast for 2016 is for an improving, but relatively flat, $3.54 trillion. That would be a 0.6 percent increase.

Gartner blames a strong U.S. dollar for the global decline, because it effectively increased the price of exports by as much as 20 percent. Political and economic instability in countries such as Russia and Brazil also contributed to the spending problems. By comparison, the U.S. saw an increase in IT spending.

In the U.S., IT spending increased 3.1 percent to $1.14 trillion. The U.S. forecast this year is for a 1.2 percent increase.

Globally, "we're just in this anemic growth period," John-David Lovelock, a research vice president at Gartner. The countries who saw the most problems with IT spending include Russia, Japan and Brazil.

The economic issues also changed how firms bought IT products and services, said Lovelock.

Instead of buying a product license for $1 million, for instance, users are switching to SaaS products for $100,000 a year. Cloud services have also replaced physical servers, he said.

Globally, there were declines in every area of IT spending, including software, devices and services. The only area to post growth was data center systems spending, largely thanks to cloud.

The IT area expected to see the largest gains this year is software; it is expected to rise 5.3 percent to $326 billion globally. CRM is the hot area, as users seek to integrate social media with the business needs.

This story, "IT spending tanked worldwide last year" was originally published by Computerworld.

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