Gartner drops tech spending outlook for 2013

Spending still expected to reach $3.7 trillion this year

Tech is big business. And by that I mean BIG business. Big as in the trillions of dollars type of business. Yes, trillion, with a T.

Worldwide tech spending is expected to reach over $3.7 trillion this year, according to research put out by Gartner on Tuesday. If you would like that number to be put into some kind of perspective, it actually outpaces the entire U.S. budget for 2013, which is $2.902 trillion. So yeah, it'sa lot of money.

Still, if Gartner's prediction is accurate it would represent a 2% rise in worldwide spending from $3.648 trillion in 2012, but would also be less than what the firm had originally anticipated. Last quarter Gartner had predicted that overall tech spending would rise of 4.1% for the year.

So why the downgrade? 

"Exchange rate movements, and a reduction in our 2013 forecast for devices, account for the bulk of the downward revision of the 2013 growth," Richard Gordon, managing vice president at Gartner, said in a statement.

"Regionally, 2013 constant-currency spending growth in most regions has been lowered. However, Western Europe's constant-currency growth has been inched up slightly as strategic IT initiatives in the region will continue despite a poor economic outlook." 

I'm going to be honest with you: that was all a bit technical for me, so I hope you understood it better than I did! (I can give good conversation about a lot of diffferent topics; global currency rates is not one of them.)

Anyway, with that out of the way we can get to the good part: where exactly those trillions of dollars are going, and which sectors of the tech space are growing the fastest.

First of all, the $3.7 trillion outlined by Gartner encompasses five different categories: devices, data center systems, enterprise software, IT services, and telecom services.

When broken down, the biggest sector,by far, is telecom services, with over a third of the total amount taken in.

Telecom services is expected to take in $1.655 trillion in 2013, around $900 million more than any other category. It should be noted, though, that this was also the only sector that actually declined in 2012, losing 0.7%. And, while growth will be positive again this year, it is also the one that will have the slowest growth in 2013, with a rise of only 0.9% from $1.641 trillion in 2012..

"Fixed broadband is showing slightly higher than anticipated growth,"  Gartner pointed out. "The impact of voice substitution is mixed as it is moving faster in the consumer sector, but slightly slower in the enterprise market."

The category with the biggest growth year to year will be enterprise software. This sector took in $285 million in 2012 and that number is expected to grow 6.4% to $304 million this year.

The higher growth rate reflects "expanded coverage into e-commerce, social and mobile," Gartner says, though, at the same time, expectations for digital content creation and operating systems have been reduced due to the impact from SaaS and changing device demands.

The sector that is going to slow down the most is devices, which will grow 2.8% this year, down from 10.9% growth in 2012. Such a big slowdown is actually a big step down from where even Gartner predicted it would be this year.

Last quarter, Gartner had expected growth to be much higher, at 7.9%, and the sudden drop-off is being attributed to weak PC sales. New devices coming out in the second have will "fail to compensate for the underlying weakness of the traditional PC market," according to the report.

It would seems as though this lowered outlook is probably another factor in the overall lowered estimate.

Tablet revenue for 2013 is expected to grow 38.9%, while mobile phone revenue is projected to increase 9.3%. The device category is expected to see $695 million in sales this year, up from $676 million last year.

(Image source: https://venturebeat.com)