Gartner: Global IT spending to shrink in 2015

Strong US dollar will force IT prices to rise and spending to shrink

Global IT spending is set to shrink by $48bn in 2015, according to latest forecast from Gartner.

The analyst house predicts that the US dollar’s strength against almost all the currencies will have a significant impact on IT spending. As a result, Gartner has revised its global forecast to 1.3% for the year, compared to the 2.4% figure it published just three months ago.

Despite the apparent decline, Gartner insisted that IT spending remained in good health and the drop could almost exclusively be attributed to turbulent foreign exchange market.

"This is not a crash, even if it looks like one," said John-David Lovelock, research vice president at Gartner. "The recent rapid rise in the value of the US dollar against most currencies has put a currency shock into the global IT market."

At constant currency, IT spending would be more like 3.1% for the year. Lovelock said that as a result of the market conditions, price rises would be unavoidable.

“Every product or service that has a US dollar-based component must have those costs covered at the lower exchange rate. The simple implication is that there will be price rises,” he warned.

“However, there are many other market forces at work -- protecting US dollar profits will require a nuanced and multifaceted approach involving pricing, partners and product management."

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