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IT Spending Expected to Drop in 2016- Valutrics

Overall IT spending is forecast to decline slightly this year compared to IT spending in 2015, according to Gartner. Currency fluctuations primarily account for the anticipated dip, as well as lingering reservations about the global economy in general. In addition, the smartphone market is approaching saturation, Gartner reports, while a slowdown in China’s growth is eroding spending on fixed voice services. The sobering outlook does not, however, translate to any halt in digital initiatives on the part of enterprises. But it does mean CIOs and other leaders will need to revise spending models, such as the redirecting of savings from legacy system optimization to fund these new initiatives, to support continued innovation. “An undercurrent of economic uncertainty is driving organizations to tighten their belts, and IT spending is one of the casualties,” said John-David Lovelock, research vice president at Gartner. “Concurrently, the need to invest in IT to support digital business is more urgent than ever. Business leaders know that they need to become digital businesses or face irrelevance in a digital world. To make that happen, leaders are engaging in tough cost optimization efforts in some areas to fund digital business in others.” (Note to readers: Spending percentage increases/decreases noted here sometimes do not literally reflect the actual spending numbers cited due to the rounding off of those numbers.)