Political uncertainty in global markets will cause IT spending worldwide to grow at 2.7 per cent year-on-year in 2017 to $3.5 trillion, down from earlier estimates of 3 per cent growth over 2016, as many enterprises may choose to forestall IT investments amid a wait-and-see approach, according to global research firm Gartner.
Infosys Q3 net profit rises 7% at Rs 3,708 crore, lowers dollar revenue guidance
"2017 was poised to be a rebound year in IT spending. Some major trends have converged, including cloud, blockchain, digital business and artificial intelligence. Normally, this would have pushed IT spending much higher than 2.7 per cent growth," said John-David Lovelock, research vice president at Gartner.
The IT research firm said in a report that worldwide devices spending (PCs, tablets, ultramobiles and mobile phones) is expected to remain flat in 2017 at $589 billion. However, the growth is likely to rebound in 2018 driven by emerging markets where smartphones are used as the main computing device and replaced more regularly than in mature markets.
The global IT services market is expected to grow at 4.2 percent in 2017. Buyer investments in the digital business, intelligent automation, and services optimisation and innovation continue to drive growth in the market, but buyer caution, fuelled by broad economic challenges, remains a counter-balance to faster growth.
"The range of spending growth from the high to low is much larger in 2017 than in past years. Normally, the economic environment causes some level of division; however, in 2017 this is compounded by the increased levels of uncertainty," said Lovelock. "The result of that
uncertainty is a division between individuals and corporations that will spend more — due to opportunities arising — and those that will retract or pause IT spending."
Additionally, Gartner said in the report that aggressive build-out of cloud-computing platforms by Microsoft, Google and Amazon is pushing the global server forecast to reach 5.6 per cent growth in 2017, up 3 per cent from last quarter's forecast.
On Thursday (January 12), Tata Consultancy Services reported that its consolidated net profit in the December quarter rose 10.9 per cent to Rs 6,778 crore from Rs 6,110 crore in the corresponding quarter in the last financial year. On a sequential basis, the growth is 2.9 per cent from Rs 6,586 crore in the September quarter.
On Friday (Jan 13), Infosys announced a net profit of Rs 3,708 crore for the third quarter. However, the software exporter revised its full-year revenue guidance to 8.4-8.8 per cent from eight-nine percent in constant currency terms but lowered its dollar revenue guidance to 7.2 -7.6 per cent from 8.6-9 per cent.
