World IT and telecom spending to slow to 3.7% growth in 2018

Worldwide spending on traditional hardware, software, services and telecommunications is set to increase 3.7 percent this year to USD 4 trillion, slowing slightly from growth of 4.2 percent in 2017, IDC forecast. Growth will slow further in 2019 to less than 3 percent or less than global GDP growth, as trade tariffs, rising interest rates and slowing growth in China, as well as an end to the capital spending cycle drag on the market.
 
The market researcher expects that annual spending will exceed USD 4.5 trillion by 2022, with the strongest growth over the period coming from software and services related to 3rd Platform and digital transformation projects. Hardware investments will be led by cloud service provider spending on server/storage infrastructure, while weaker growth is expected from PCs and tablets, peripherals, external storage systems, and traditional outsourcing.
 
Last year saw a significant rebound in spending on devices, driven by the improving economy and pent-up demand for PC upgrades. The smartphone market performed better than forecast in terms of value, with price increases making up for slowing shipments in many countries. Tablets continued to struggle but will return to modest growth in some countries over the next few years as premium and commercial devices begin to account for an increasing proportion of shipments. IT infrastructure spending, including network equipment, increased by 11 percent in 2017 and will continue to post annual growth in the range of 8-12 percent over the next five years even while spending on devices slows again, IDC predicts.
 
With most providers shifting to 'as a service' models, IDC sees the ICT market becoming less dependent on the economic cycle, which in the past has led to sharp swings in hardware demand. The strong overall demand for cloud services also shows no signs of slowing, despite the increased economic risks in recent months.

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