Soothsayers at Gartner group have been examining the entrails of a fat ram and are warning that the dollar will provide a major headache for IT spending.
Gartner’s analysis of IT spending this year has been downgraded as a result of the position of the dollar. The analyst house is still expecting things to be better than 2016 but only by 1.4 percent instead of the previously expected 2.7 percent.
On the plus said that is $3.5 trillion spent on IT this year but billions have been shaved off the potential amount because of ongoing issues around the dollar.
John-David Lovelock, research vice president at Gartner said that the strong U.S. dollar has cut $67 billion from our 2017 IT spending forecast.
“We expect these currency headwinds to be a drag on earnings of U.S.-based multinational IT vendors through 2017.”
The big US firms have already been forced to react to exchange rates with price rises and the chance of more problems will not be welcome to resellers or users.
Gartner is hoping that with the benefit of its warnings the industry can deal with the challenges and try to mitigate some of the impact.
The move away from physical servers towards hosted cloud services is not really helping much. The trend is helping the data centre market return to growth after being in a negative position in 2016, but it is hitting some of the established hardware brands.
“Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment,” said Lovelock.
Breaking down the forecast further there will be a dip in IT services, coming in at 2.3 percent in 2017, compared to 3.6 percent a year earlier.
On the hardware front the tablet demand will continue to wane but those selling Windows 10 business PCs will continue to enjoy growth as more customers invest in that technology.
A three-fold jump in mobile ad spend over the next five years has been predicted by Juniper Research, up from 2013’s $13bn to in the region of $40bn per year.
All the usual suspects are cited as reasons for this growth, including better use of analytics and more innovative ad formats.
But the report highlights the disproportionately low levels of ad spend on mobile – the one device most people keep with them, or close to them, all day every day.
A historical lack of effectiveness on the part of mobile advertising may have held back any appetite to invest heavily and can be attributed to imprecise monitoring and measuring, according to Juniper. As the means to measure the ends improves, so spending on mobile advertising will become more of a science and less of an art – leading to an increase.
Sian Rowlands, a research analyst at Juniper, the author of the Mobile Advertising Report, explained: When a person is carrying out a task on their mobile device, they are often focussed solely on that task, whereas we see for people who watch TV, they are often multi-tasking, or on their phone at the same time. Furthermore, viewing on mobile devices and tablets is increasingly replacing TV viewing. Due to these factors, we would say that mobile is seeing a disproportionately low ad spend versus TV, and other formats.
By comparison with the $13bn spent on mobile advertising this year, TV annual ad spends are estimated to be between $150bn and $300bn.
“I would say this low mobile ad spend is attributable to the fact that mobile adverts have been, in some instances, quite ineffective,” Rowlands continued. “However, as we move towards a time when targeting capabilities and purchasing mechanisms improve, I believe we’ll see mobile advertising reach its full potential.”
Other Key Findings from the Report Include:
- The fastest growing region, in terms of mobile ad spend, will be the Indian Subcontinent. Spend here will increase four times from 2013 to 2018.
- Advertisers can increase conversions by simply adding mobile optimised features, for instance a ‘click to call’ button, or by linking to the correct app store.
The “Mobile Advertising – It All Ads Up” whitepaper is available to download from the Juniper website.