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IT Spending Forecast, 4Q16 Update: What Will Make Deadlines in 2017?

John-David LovelockResearch Vice Presidenthttps://ca.linkedin.com/in/johnlovelock@jloveloc

For a broader insight into Gartner you can find us: @Gartner_inc on Twitter and Gartner on LinkedIn.

Rajesh Kandaswamy

Research Director

https://www.linkedin.com/in/rajesh-kandaswamy-178222

@rajeshkan

Martin Reynolds

Vice President & Gartner Fellow

https://www.linkedin.com/in/martin-reynolds-12949

Fabrizio Biscotti

Research Vice President

https://uk.linkedin.com/in/biscotti

2 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Data Center Systems

2.9%

Software7.2%

Devices0.3%

IT Services4.6%

Communications Services

1.6%

Global IT Spending & Growth for 2017

$3.5Trillion USD

2.7%CC

2.7%USD

Source: “Gartner Market Databook, 4Q16 Update”, January 2017

3 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

IT Spending Forecast (Constant Dollar):4Q16 versus 3Q16

Comm Services

IT Services

Devices

Software

Data Center

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

3Q16 4Q16 3Q16 4Q16 3Q16 4Q16 3Q16 4Q16 3Q16 4Q16 3Q16 4Q16 3Q16 4Q16

2014 2015 2016 2017 2018 2019 2020

-4.7% -0.6% 2.7%2.6% 2.6%

$B2.9%

2017 IT Spending = 3.8 Trillion in Constant US Dollars

Source: “Gartner Market Databook, 4Q16 Update”, January 2017

5

4 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

WW Growth is 2.7%, but, there are

no segments with growth near 2.7%

9 Segments, representing $900B in

spending have growth of less than 1

percent

4 Segments, representing $1,200B

in spending, have growth of over

than 5 percent

Enterprise Applicatio

n Software

Servers

External Controller-Based Storage

PCs and Tablets (Consumer)

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

20

17

CC

Gro

wth

ra

te

Average doesn’t Mean much, The market has Polarized

5 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

India

China

United StatesJapan

Greece-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2017 C

C G

row

th

Country

Average 2.7%

The USA, with the largest spend,

is on WW average of 2.7%

29 Countries, with $1.4T in

spending, have grow greater than

1% higher or lower than 2.7%

Polarization by Country

Source: “Gartner Market Databook, 4Q16 Update”, January 2017

6 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

In 2016, more devices

were sold with Apple OS

than with Microsoft OS

Premium Phone market

continues to grow in sales

and install base

PC Install base is

shrinking at -4.8% CAGR

PC Market is reliant on

replacement & Upgrades0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Apple

Mic

rosoft

Apple

Mic

rosoft

Apple

Mic

rosoft

Apple

Mic

rosoft

Apple

Mic

rosoft

Apple

Mic

rosoft

Apple

Mic

rosoft

2014 2015 2016 2017 2018 2019 2020

Unit S

ale

s o

f all

de

vic

e type

sApple outsells Microsoft in 2016

7 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Android was on 59% of all

devices sold in 2016

Android will be on 70% of

all devices sold in 2020

Android is 43.7% of all

devices in use in 2016

Android is 59.3% of all

devices in use in 2020

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

Ap

ple

Mic

rosoft

An

dro

id

2014 2015 2016 2017 2018 2019 2020

Un

it S

ale

s o

f a

ll d

evic

e typ

es

The headline ought to be:“Bronze & Silver switch places”

8 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Cloud will be a $383.4B market in

2020

At 8.9%, BPaaS is slowest

Slowing growth rates are an

indication of market size, not

interest:

Spending increases by $37.5B

in 2017

Spending increases by $50.6B

in 2020

0%

10%

20%

30%

40%

50%

60%

2015 2016 2017 2018 2019 2020

BPaaS

PaaS

SaaS

Cloud Management

IaaS

Cloud is still a pure growth market

9 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Microsoft

Salesforce

IBM

SAP

Google

Oracle

Adobe

Workday

Citrix Systems

NetSuite

CA Technologies

Infor

Click Software

20%

40%

60%

80%

100%

120%

-10% 10% 20% 30% 40% 50% 60% 70%

% o

f P

ublic

Clo

ud S

oftw

are

Revenue

2015 Software Growth

More Cloud, More Growth

Source: Software 2015 Market Share - Bubble Size represent Public Cloud Software Revenue

10 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.10 © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

At least 95% of IT organizations leverage nontrivial elements of open-source software technology in their

mission-critical IT portfolios, including cases where they might not be aware of it — an increase from 75% in 2010

11 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

OSS projects compete with proprietary efforts from the outset or precede them to market altogether

TCO, Competitive Advantage,

Increased innovation

opportunities are the top

reasons for using OSS

Community OSS /

Commercially Available or

Supported Versions

Effectively OSS is going in

everything it is build

Enterprise Application Integration

Hub

Enterprise Mobile

application

Big Data For

Analytics

In-memory computing

infrastructure

Digitalized Business

Advanced Analytics

Implement Bi-Modal IT

PROJECTS (AIM MARKET)

Source: Market Dynamic Model for Application Infrastructure and

Middleware Software 2017

12 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

9 of 10 enterprises

will do a

blockchain

project

13 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

• Blockchain is a reality

outside of Bitcoin

• 2017 will bring both

production and proof of

concept (PoC) projects

• Most successful PoCs

will not proceed further

Source: Gartner Enterprise IT survey 2017 (n=1084)

Question: Please indicate the year your organization started or

plans to start blockchain project or initiative?

14 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

2014 2015 2016 2017 2018 2019 2020

CAGR (%)

2015-2020

Data Center Systems

Spending ($B) 166 171 170 175 176 178 181 1.08%

Annual Growth (%) 2.9% -0.6% 2.6% 1.0% 1.0% 1.4%

Devices

Spending ($B) 649 646 588 589 589 593 593 -1.70%

Annual Growth (%) -0.6% -8.9% 0.1% 0.0% 0.6% 0.0%

Software

Spending ($B) 310 314 333 355 380 407 436 6.79%

Annual Growth (%) 1.1% 5.9% 6.8% 7.0% 7.0% 7.2%

IT Services

Spending ($B) 897 866 900 938 981 1029 1081 4.54%

Annual Growth (%) -3.4% 3.9% 4.2% 4.7% 4.9% 5.0%

Communication Services

Spending ($B) 1,541 1,399 1,384 1,408 1,426 1,441 1,462 0.88%

Annual Growth (%) -9.3% -1.0% 1.7% 1.3% 1.0% 1.4%

All IT

Spending ($B) 3,564 3,395 3,375 3,464 3,553 3,648 3,752 2.02%

Annual Growth (%) -4.7% -0.6% 2.7% 2.6% 2.6% 2.9%

All IT (excl. Comm Services)

Spending ($B) 2,023 1,997 1,990 2,057 2,127 2,207 2,290 2.78%

Annual Growth (%) -1.3% -0.3% 3.3% 3.4% 3.7% 3.8%

Excluding Communication Services, Overall IT Spending Will Be 2.1 Trillion US Dollars in 2016

Source: “Gartner Market Databook, 4Q16 Update”, January 2017

15 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

All Gartner’s IT Spending Forecasts Can Now Be Accessed via Gartner Market Statistics Online

1

2

3

16 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Recommended Research

Gartner Market Databook, 4Q16 Update

Forecast Alert: IT Spending, Worldwide, 4Q16 Update

Market Definitions and Methodology: IT Markets

Smarter With Gartner @: http://www.gartner.com/smarterwithgartner

View all upcoming Gartner webinars: http://www.gartner.com/explore/events

17 CONFIDENTIAL AND PROPRIETARY I © 2017 Gartner, Inc. and/or its affiliates. All rights reserved.

Dedicated Landing Page: www.gartner.com/technology/research/it-spending-forecast/

18 CONFIDENTIAL AND PROPRIETARY I © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

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19 CONFIDENTIAL AND PROPRIETARY I © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

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