A global IT spending forecast from Gartner calls for a 1.4 percent rise year-to-year in 2017 to total $3.5 trillion. Expecting the strong U.S. dollar to take its toll, Gartner revised its 2Q annual 2017 market forecast downwards from the 2.7 percent forecast in 1Q.

More specifically, the strong dollar led Gartner to reduce its annual 2017 IT spending forecast $67 billion. Gartner expects the resulting currency headwinds will continue throughout 2017.

A strong U.S. dollar makes dollar-based IT goods and services more expensive in markets whose value isn’t pegged to the U.S. currency.

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Drilling down into Gartner’s 2Q annual 2017 forecast, the market researcher forecasts global data center system revenue will rise 0.3 percent year-to-year. That’s a good sight better than the contraction experienced in 2016.

Global IT Spending Forecast
Gartner points out that vendors in this market segment are experiencing a slowdown in server sales, however. “We are seeing a shift in who is buying servers and who they are buying them from,” said Gartner Research VP John-David Lovelock.

“Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment.”

In addition, a rebound and strong mobile and “ultramobile” phone sales, along with smaller improvements in sales of printers, PCs and tablets, will fuel a 1.7 percent rise in IT devices for an annual $645 billion in revenues worldwide, Gartner forecasts.

In counterpoint, tablet sales continue to decline significantly amidst extended replacement cycles. The same is expected regarding desktop and laptop PCs, sales of which Gartner expects will decline throughout the forecast period.

Turning to global IT services, Gartner calls for 2.3 percent growth year-to-year in 2017, down from 3.6 percent in 2016. Resulting changes in U.S. foreign and domestic policies anticipated as a result of the election of Donald Trump as U.S. president prompted Gartner to make modest revisions to its 1Q annual 2017 forecast. On balance, Gartner expects the Trump administration’s “business-friendly policies” will have a mildly positive effect on the U.S. service implementation service market amidst expected large increases in infrastructure spending.

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