Worldwide IT spending is forecast to total $3.54 trillion in 2016, barely a 0.6 percent increase over 2015 spending of $3.52 trillion, according to world's leading information technology research company Gartner, Inc.
The year 2015 saw the largest US dollar drop in IT spending since Gartner began tracking IT spending. At least $216 billion less was spent on IT in 2015 than in 2014 and 2014 spending levels won't be surpassed until 2019, a company statement said on Tuesday.
"The rising US dollar is the villain behind 2015 results," said John-David Lovelock, research vice president at Gartner.
"The US multinationals' revenue faced currency headwinds in 2015. However, in 2016 those headwinds go away and they can expect an additional 5 percent growth," Lovelock added.
The Gartner worldwide IT spending forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets.
According to the forecast, the devices market (personal computers, ultramobiles, mobile phones, tablets and printers) is to decline 1.9 percent in 2016.
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The combination of economic conditions preventing countries such as Russia, Japan and Brazil from returning to stronger growth, together with a shift in phone spending in emerging markets to lower-cost phones, is overlaid with weak tablet adoption in regions where there was an expectation of growth, Gartner said.
Ultramobile premium devices are expected to drive the PC market forward with the move to Windows 10 and Intel Skylake-based PCs, it added.
Data centre systems' spending is projected to reach $75 billion in 2016, a 3.0-percent increase from 2015. The server market is the segment that has seen the largest change since the previous quarter's forecast.
The worsening economic environment in emerging markets has had little effect on the global enterprise software spending forecast for 2016, with IT spending on pace to total $326 billion, a 5.3-percent increase from 2015, Gartner said.
Spending in the IT services market is expected to return to growth in 2016, following a decline of 4.5 percent in 2015. IT services spending is projected to reach 940 billion in 2016, up 3.1 percent from 2015. This is due to accelerating momentum in cloud infrastructure adoption and buyer acceptance of the cloud model.
Telecom services spending is projected to decline 1.2 percent in 2016, with spending reaching $1,454 trillion. The segment will be impacted by the abolition of roaming charges in the European Union and parts of North America.
While this will increase mobile voice and data traffic, it will not be enough to counter the corresponding loss of revenue from lost roaming charges and premiums, according to the Gartner forecast.
Gartner's IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services.
The company uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognise market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.