Global Business Spending on Communications is Falling

One of the curiosities of a world, and an economy that is far more reliant on computing resources and communications is that consumers and businesses might be able to wring more value from a smaller amount of spending. In other words, we might assume an information society means more instensive and essential roles for computing and communications. That might also imply higher spending on such services and products.

That is true for mobile services and markets in lesser-developed regions, where consumers and businesses arguably are starting to spend more money on communications.

It is not so clear what is happening in developed markets. Gartner now forecasts that communications service spending will dip two percent, with global spending reaching $1.4 trillion. Assuming growing spending in developing regions of Asia, Africa and Latin America, that suggests declining spending in developed regions.

As always, some product categories are growing while others decline. Demand for legacy products arguablyis falling, while demand for Ethernet connections and cloud services is growing.

Still, communications service spending will dip two percent, with global spending reaching $1.4 trillion, Gartner argues.

Worldwide IT spending is forecast to total $3.49 trillion in 2016, a decline of 0.5 percent over 2015 spending of $3.5 trillion, according to Gartner analysts.

“Most traditional IT now has a ‘digital service twin’ — license software has cloud software, servers have Infrastructure as a Service, and cellular voice has VoLTE,” says  John-David Lovelock, Gartner VP. “Things that once had to be purchased as an asset can now be delivered as a service.”

That can change spending patterns, making them less “lumpy.” In place of stairstep capex, an entity might see a more-linear monthly subscription pattern.

The device market will decline 3.7 percent in 2016.