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I used to claim that Gartner was a competitor of TechMarketView and its predecessors. But in almost every case where a client is rich enough to afford Gartner research they tend to buy us too. Anyway, we do different things. TMV looks at all things from a UK perspective – Gartner is global.
Yesterday, Gartner issued their updated forecasts. You can read a summary in today’s FT - Global IT spending expected to grow by 4%.
At long last Gartner seems to be catching up with the major theme we introduced in 2002 with our“IT’s all over now” speech. We forecast then that the sector had entered its maturity phase when historic growth rates of 3-4x GDP would be replaced by growth of nearer 1xGDP. As it happened even that was too optimistic as IT growth has been <1xGDP in the 10 years since. Our current forecasts are for <1xGDP growth for the next 10 years too.
Richard Gordon, managing vice-president at Gartner, said the projected growth rates were still low for the IT sector. “Three to four per cent is a really low rate historically and actually it signifies the sector maturing a bit.” The sector “was unlikely to return to previous growth rates of 5-10 per cent”.
But we think that Gartner continues to be too optimistic. We believe that IT is deflationary. All the trends from off-shoring, cloud, BYOT, commoditisation etc actually deflate IT spend. We see this trend accelerating rather than reversing. Current examples of this are the tablet market. First the tablet market hit revenues from the PC market. Now the advent of mass market tablets is hitting prices in the tablet market itself. Another current example is how the shift to VOIP and increased use of data services has hit the voice market. Although revenues from mobile data are growing fast they do not compensate for the declines in the even larger voice (and text) market.
I happen to believe that accurate predictions are critical for the health of our sector. If you base your investment on over optimistic predictions the effects can be terminal. We’d all welcome higher growth but remember “Hope is not a strategy”.
