Cloud Pushing IT Spending to $3.7T in 2018

ORLANDO, Fla. -- Gartner Symposium & ITxpo -- Spending on cloud, including infrastructure-as-a-service (IaaS), will help push the global IT market to $3.7 trillion next year, according to new numbers Gartner released at its show here this week.

Overall, IT spending should increase about 4.3% between 2017 and 2018, the October 3 report from Gartner found. IT spending is expected to top $3.5 billion this year, before ticking up to $3.7 billion next year.

While spending on traditional data center hardware and systems is expected to stay flat, businesses intend to ramp-up buying different cloud services over the next 12 months, including IaaS, as well as platform-as-a-service (PaaS) and communication-as-a-service (CaaS).

Figure 1: Nickel & Dimed (Source: AlexHbaiu via Pixabay)

This spending on cloud is a way for businesses to start their digital transformation process, which is major theme of this year's Gartner conference. (See Will AI Solve the IT Jobs Shortage?)

"The IT buying landscape is changing: Digital business transformation is an effort to create connected, platforms and new industry revenue streams," Gartner Analyst John-David Lovelock wrote in the report. "Organizations that are not creating new digital business models or new ways to engage constituents or customers, are falling behind. Those vendors that do not move more quickly than their clients, will be left behind."

In addition to cloud services, Gartner is predicting that spending on devices, especially with the arrival of the recently announced iPhone 8 and iPhone X, is expected to grow about 5% over the next year, to total $697 billion. Enterprises are also expected to invest more in PCs, with IT shops upgrading to Windows 10. (See Apple Fixes Office 365 Bug in iOS 11.)

Enterprise software is expected to grow the most between 2017 and 2018 -- an increase of 9.4% for a total of $387 billion. IT service is also expected to increase about 5.3% to total $980 billion by the end of next year.

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The biggest segment of the IT market in terms of dollars -- communication services -- is expected to total $1.4 trillion by the end of 2018, but that's only an increase of about 2.2% from 2017.

The one part of the market that is expected to stay flat is data center systems, which includes traditional IT hardware. Spending on gear is expected to only increase 1.8% and total $176 billion by the end of next year.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.