Communications Services is 40% of IT Spend

Communications Services is 40% of IT Spend

Gartner Says Global IT Spending to Reach $3.5 Trillion in 2017. Analysts Discuss Impact of Brexit and U.S. Presidential Election on IT Spending During Gartner Symposium/ITxpo 2016, October 16-20, in Orlando

Driven by growth in software and IT services revenue, worldwide IT spending is forecast to reach $3.5 trillion in 2017, up 2.9 percent from 2016 estimated spending of $3.4 trillion, according to the latest forecast by Gartner, Inc.

The bright spot for the IT industry has been the software and IT services segments. Software spending is projected to grow 6 percent in 2016, and it will grow another 7.2 percent in 2017 to total $357 billion (see Table 1). IT services spending is on pace to grow 3.9 percent in 2016 to reach $900 billion, and increase 4.8 percent in 2017 to reach $943 billion.

Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)

2016 Spending

2016 Growth (%) 2017 Spending

2017 Growth (%)

Data Center Systems

173

1.3 177

2.0

Software

333

6.0 357

7.2

Devices

597

-7.5 600

0.4

IT Services

900

3.9 943

4.8

Communications Services

1,384

-1.1 1,410

1.9

Overall IT

3,387

-0.3 3,486

2.9

Source: Gartner (October 2016)

 For some time Gartner has shown Telecommunications Services, now Communications Services, are in slight decline, as shown for 2016 with growth of -1.1%.  In 2017 they now forecast that this will be reversed with growth of 1.9%.

Communication Services still represent 40% of total IT spend according to Gartner’s forecast for Worldwide IT Spend. This will be similar in New Zealand so ask yourself what you are doing to manage this part of your IT budget.

  • Companies pay their telecommunications bills without checking them and even if they do most likely do not understand what they are paying for and where they can save cost.
  • The convergence of voice, data and mobile has led to a very competitive market leveraging data services, integrated mobile plans and the introduction of new technologies such as SIP.
  • TeleConsultants has assisted our clients save 10-20% on their existing telecom services. That would be over 5% of IT spend using the ratios in Table 1 above
  • Transitioning to new services can lead to savings in excess of 30%. Over 10% of IT spend

Saving 30% or more of your annual telecommunications bill can go straight to the bottom-line.

“I have to admit to being sceptical at first but the TeleConsultants review was extremely thorough and the return on investment was less than one week!”       Mark Thorn – General Manager Information Services

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