Gartner has this week predicted a 1.3% drop in global IT spend in 2015.
Although the main culprit appears to be the strong US dollar, the industry also faces an imminent spending squeeze as well as pressure from expensive security breaches.
But why is there such a marked fall in these numbers, considering the previous estimates from Gartner were pointing towards 2.4% growth for the year?
I believe that there are two core factors at play here.
On one hand, there is the inexorable commoditisation of technology which is driving down like-for-like costs, offset by consumerisation.
Secondly, there is the proliferation of IT as part of everything around us. Everything we do and interact with is either supported by or enabled by IT.
I would argue that, while traditional like-for-like numbers may show a reduction, if you look at wider business, IT continues to grow faster than any other sector. It’s just that we no longer perceive it as ‘IT’.
While you could ask how quickly will the sector bounce back from these figures, instead this issue needs to be looked at from a much broader view.
While business and life is cyclical, nothing ever truly returns to the way it was exactly before, but instead as a variant of what it once was.
The core point is it will never return to the ‘way it was’ but IT as an industry is already more important, bigger and growing faster, than it ever has done before.
IT is increasingly becoming ingrained in the core business function for many organisations. For instance – investment bank Goldman Sachs now describes itself as a tech company which delivers investment banking. It’s telling that the bank has more programmers and engineers to work on tech issues than Facebook.
Previously, IT was seen as separate to the business – a supporting function serving ‘the business’.
But now IT no longer sits in isolation from the rest of the core business functions it not only enables them, it runs them. In fact it’s changed in such a way you can argue IT is the foundation of the modern business. Digital business is a profit centre.
The business models and what you consider as IT have changed. In my view, it has never declined it has just changed shape.
So is it time we changed the way these numbers are calculated, if 1.3% is infact not reflective of the industry as a whole? Is it time to redraw the map on IT spend? Let me know your thoughts.
Jon is Chief Technology Officer for Fujitsu in the UK & Ireland and leads the Fujitsu Distinguished Engineer programme. Find out more about the programme here.
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