IT Spending in 2016
by Kate Smith, Director, Sales & Marketing
A good metric for any strong economy is spending, and a strong indicator of business growth and stability is IT spending. When thinking about what SMB organizations will spend technology budgets on for 2016 I immediately think of cloud technologies including Software as a Service, Platform as a Service and Infrastructure as a Service. As an always on, always available computing environment is now the norm, it’s imperative that SMB organizations keep pace with technology advancements to fuel growth.
According to Gartner, Worldwide IT spending is expected to increase by 6% in 2016. “Worldwide IT spending is forecast to total $3.54 trillion dollars in 2016, a 6% increase over 2015 spending of $3.52 trillion dollars,” according to Gartner, Inc. (Gartner, Inc., 2016) “The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.” (Gartner, Inc., 2016)
Gartner predicts that spending on datacenter systems, software, devices, IT services and communications services will fuel the 6% growth in 2016. This makes sense as organizations are becoming less reliant on physical devices and on-premises infrastructures in favor of scalable and easily manageable cloud-based solutions. Cloud computing in the form of SaaS, PaaS and IaaS will also give SMB organization more bang for their buck.
Gartner expects the datacenter system’s spending, “to reach $75 billion in 2016, a 3% increase from 2015. The server market is the segment that has seen the largest change since the previous quarter's forecast. The server market has seen stronger-than-expected demand from the hyperscale sector, which has lasted longer than expected. Typically, this segment has spikey demand which lasts for a couple of quarters before moderating. Demand in this segment is expected to continue to be strong through 2016.” (Gartner, Inc., 2016)
A big area for growth is in software and Gartner predicts a 5.3% increase over 2015, “with IT spending on pace to total $326 billion.” (Gartner, Inc., 2016) SaaS has seen a ton of traction as SMB organizations opt for subscription type licensing such as Office 365.
Lastly, IT services spending will see growth in 2016 as it is projected to reach $940 billion, up 3.1% from 2015. IT infrastructures of today contend with a plethora of interconnectivity including cloud computing, on-premises environments, cloud environments, third party applications, end user devices (some personal, some company provided), etc. SMB organizations need, more than ever, an MSP that can provide the proper resources and expertise to leverage all this technology.
Gartner, Inc. (2016). Gartner Says Worldwide IT Spending is Forecast to Grow 0.6 Percent in 2016. STAMFORD: Gartner, Inc.
About the Author
Kate Smith, SecurElement’s Director, Sales & Marketing is responsible for SecurElement’s overall sales and marketing strategy as well as ongoing partner relationships with organizations such as Microsoft, Cisco, Barracuda and many others.