What happens when an unstoppable force, i.e. CIO mandates and priorities, meets an immovable object, i.e. IT budgets? While IT spending will hit $3.7 trillion in 2013, according to Gartner, that’s only a 4.2% increase from 2012. And with upwards of 75% of IT budgets already tied up in keeping the lights on, funding new initiatives like mobility, cloud, social networking and Big Data make for an unenviable situation.
Spending on devices, including PCs, tablets, mobile phones and printers, will grow 6.3% to $666 billion in 2013, with the long-term forecast through 2016 expected to average 4.5%. Enterprise software spending is forecast to total $296 billion in 2013, up 6.4%, primarily driven by key markets such as security, storage management and customer relationship management. Gartner expects that by 2014, markets aligned to big data and other information management initiatives, such as enterprise content management, data integration tools, and data quality tools will begin to see increased levels of investment. At $147 billion, data center spending will be up 4.5% in 2013, and just 4.2% in 2014.
The biggest chunk of the spending – $1.7 trillion – comes from the telecom services market, although growth will be predominately flat over the next several years as revenue from mobile data services compensates for the declines in total spending for both the fixed and mobile voice services markets. By 2016, Gartner forecasts that mobile data will represent 33% of the total telecom services market, up from 22% in 2012.
That’s the immovable object. The irresistible force includes mobility, where more than 1.6 billion smart mobile devices will be purchased in 2016, and 66% of the mobile workforce will own a smartphone, and 40% percent of the workforce will be mobile.
“Mobile is about computing at the right time, in the moment. It is the point of entry for all applications, delivering personalized, contextual experiences,” said Peter Sondergaard, senior vice president at Gartner and global head of Research. “It means: marketing gets more time with the customer; employees become more productive; and process flows get dramatically cut.”
Social computing is moving from being just on the outside of the organization to being at the core of business operations, said Sondergaard. “It is changing the fundamentals of management: how you establish a sense of purpose and motivate people to act. Social computing will move organizations from hierarchical structures and defined teams to communities that can cross any organizational boundary.”
A relatively new segment, Big Data is expected to outpace the overall IT market by 7X, with a 31.7% compound annual growth rate, reaching $23.8 billion in 2016, according to IDC. “The Big Data technology and services market represents a fast-growing, multibillion-dollar worldwide opportunity,” said Dan Vesset, vice president for IDC’s Business Analytics and Big Data research. “It is an important topic on many executive agendas and presents some of the most attractive job opportunities for people with the right technology, analytics, communication, and industry domain expertise.”
Cisco expects that data center traffic will grow fourfold by 2016, and cloud traffic, the fastest-growing component of data center traffic, will grow sixfold. For example, U.S. public IT cloud services revenue will experience a CAGR of 18.5% over the forecast period, from $18.5 billion in 2011 to $43.2 billion in 2016, according to IDC.
The bottom line is CIOs will have to continue to pull hats from rabbits for the foreseeable future.