Global IT Spending on the rise in 2014 – will Outsourcing inch up

Outsourcing is posed to get a boost with the global IT spending slated to rise in 2014 and further in 2015.

After few years of stagnant growth, Global spending on technology will rise 6.2 percent in U.S. dollars to US$2.22 trillion in 2014, helped by an improving economy and growing interest in areas such as mobility and cloud computing, according to new data from Forrester Research. If the prediction bears out, it will be an improvement: IT spending grew only 1.6 percent in U.S. dollars during 2013. Growth will quicken in 2015, rising 8.1 percent in U.S. dollars, but will remain “well below the double-digit growth rates of the late 1990s and 2000 times.

The U.S. dollar is expected to be weaker compared to many currencies next year, and IT spending will rise only 5.5 percent in local currencies, a percentage point less than previous projections, according to the full Forrester report. U.S. buyers are setting the pace, being responsible for 40 percent of all tech spending, while the nation’s economy has continued to grow. This is despite some political turmoil. But economies in Western Europe are only now beginning to recover while Brazil, China, India and Russia are going through a period of sluggish and uneven growth looking at big brother at times in US.

Software will account for the largest share of tech spending in 2014, at $568 billion, followed by IT outsourcing at $442 billion, IT consulting and integration services at $421 billion, computer equipment with $416 billion and communications equipment at $373 billion, according to Forrester’s report.

Software’s leading position is not a surprise, because it is the focal point for tech innovation today, whether that innovation takes the form of cloud computing and adoption of software-as-a service (SaaS) and platform-as-a-service (PaaS); smart computing and big data, real-time predictive analytics, and smart process apps; or mobile computing and mobile apps and enterprise app stores. IT consulting and outsourcing firms “ride behind software purchases,” helping customers implement and use it.