Canadian server, storage spends heat up as global IT purchases cool down: IDC

Reserch firm International Data Corp. (IDC) has lowered its forecast for worldwide information technology spending due to the  economic slowdown and crisis in certain countries, but said technology expenditures appear to be in good shape in Canada.

IDC said global IT spending will increase by 4.1 per cent this year, down from its previous forecast of 4.5 per cent and also down from last year’s growth of 4.5 per cent. Macroeconomic “wild cards including the crisis in Ukraine and the slowdown in China” impacted general business confidence, according to IDC’s latest Worldwide Black Book report. The Black Book, provides forecasts for IT spending in 54 countries around the world and focuses on 25 individual market segments across hardware, software, IT services and telecom services.

IDC sees positive momentum in mature economies such as Canada and the United States. Server and storage spending will rebound after the slowdown in 2013 and IT services will increase to more than 2 per cent.

In Canada, IT spending growth will grow from 3.3 per cent last year to 5 per cent in 2014 due to demand in the PC, server and storage markets.

Even the once red hot mobile device market is showing signs of cooling down. IDC predicts mobile phone growth in 2014 will accelerate slightly from 2.9 per cent to 3.1 per cent due to the expected pickup in infrastructure investments and related downstream effect of IT services revenue.

“As smartphone growth continues to cool from phenomenal expansion in of the past few years, tablet shipments have performed weaker than expended over the past couple of quarters,” said Stephen Minton, vice-president of IDC Global Technology and Industry Research Organization (GTIRO) in a statement. “This volatility coupled with the macroeconomic uncertainty in many emerging markets, is somewhat masking more positive underlying foundations for enterprise IT spending…”

He noted that businesses are still investing in order to work off pent-up demand to replace old servers, storage and network gear.

“Some of that spending is also driving IT services, despite the fact that an increasing number of businesses are moving more of their traditional IT budget to the cloud,” he added.

Around 10 per cent of software spending will have moved to the cloud by the end of 2014, while infrastructure-as-a-service will represent 15 per cent of all spending on servers and storage.

“While this is creating significant disruption for IT vendors targeting traditional IT budgets, it is also driving equally significant short-term opportunities for those vendors that successfully capture mindshare for their cloud-based solutions,” the report said.

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Nestor Arellano
Nestor Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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