Global IT spending across vertical industries to decline 3.5% by year end
WORLDWIDE Information and Technology spending across vertical industries is forecast to total $2.69 trillion in 2015, a 3.5 per cent decrease from 2014, according to the latest forecast by Gartner, Inc. Analysts said the rising U.S. dollar is chiefly responsible for the slowdown.
“Appreciation of the U.S. dollar (mainly against the euro, yen and the ruble), along with the relative slowdown of emerging markets (particularly Russia, Brazil and China), had a double impact on IT spending in 2015, and explains the downward revision in the forecast,” said Anurag Gupta, research vice president at Gartner. “Unsurprisingly, most technology firms reporting revenue in U.S. dollars have taken a negative hit on their quarterly revenue earnings.”
Although all industries are expected to experience negative growth in 2015, given currency exchange rates, Gartner’s projections for the top three growth industries are consistent with the previous quarter’s forecast, with retail, banking and securities, and healthcare providers leading industry growth.
IT spending in the retail sector is forecast to decline 1.5 per cent in 2015. Technologies that help understand customers better, improve engagement through multichannel experience and facilitate the buying process are high-priority areas. Within stores, creating IT infrastructure to accept various mobile payment systems and digital wallets will be high-priority items in the second half of 2015. We also see continuing infrastructure investments in new point of sale (POS) terminals, as merchants in many countries comply with the October 2015 deadline to convert to new systems, whereby, the liability will shift from credit card issuer (such as Europay, MasterCard and Visa [EMV]), to merchants for accepting nonchip, PIN-based cards.
Even as IT spending in the banking and securities segment is forecast to decline 2.4 per cent in 2015, Gartner expects banks in developed markets to double their IT budgets to support digital and other new technology initiatives through 2019 while reducing legacy maintenance, to sell products, service customers and reduce operational costs.
“As banks grapple with growth and regulation issues, while battling new financial technology competitors, they will also look to invest in data solutions, driven by availability of big data, analytics tools and competition from fintech companies that rely on big data and analytics more to reach the right customer and analyze the risks,” said Research Director at Gartner, Rajesh Kandaswamy, who added: “Cybersecurity remains an area of focus for executives in consumer banking segments, while an emerging area of interest is smart machine technology, including artificial intelligence, robotic process automation, intelligent analytics and deep learning.”
In the healthcare provider industry, IT spending will decline 2.7 per cent in 2015. The U.S. is the largest healthcare IT market globally, and it accounts for about 40 percent of the overall spending. It is also a focus of global attention by information and communication technology firms due to the current ongoing investments in healthcare IT, driven mainly by the government’s Health Information Technology for Economic and Clinical Health (HITECH) Act, which provides financial incentives for hospitals and physicians to invest in IT, including electronic health records and other health information management systems.