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Gartner 2016 IT Spending Forecast: Tech’s Good, Bad, Ugly

How is technology spending shaping up for 2016? Gartner has revised its forecast downward — with overall IT spending expected to drop 0.5 percent this year. Still, here are some bright spots for VARs, MSPs and channel partners navigating the market. Here are the key data points…

Let’s start with the ugly┬ábefore jumping to the bad and then good.

The Ugly: Oh, Those Painful Endpoints

Alas, spending on hardware endpoints — PCs, smartphones, tablets, printers — will drop 3.7 percent to $626 billion. Windows 10 hasn’t jumpstarted the PC market. And printer makers like Xerox (breaking into two), HP Inc. (already broken off from Hewlett-Packard Enterprise) and Lexmark (up for sale) show just how difficult that market is these days.

What it means for VARs and MSPs: Vendors keep telling me there’s still ample opportunity to manage customer endpoints. But I keep saying partners should spend more time focused on customer workloads out in the cloud. So far, the vendors are right — MSPs are still growing thanks to proper endpoint management. But I do think the pendulum absolutely will swing to cloud workloads.

The Bad: Communications Services

Alas, communications services is expected to decline by 2 percent to $1.44 trillion. Traditional telcos continue to be squeezed by cord cutters and other services that are shifting to the IP world.

What it means for VARs and MSPs: No cause for panic. Just check out what companies like Diverse Technology Solutions are doing to address the cloud-based communications wave.

The Good, Part I: Enterprise Software

Enterprise software spending will rise 4.2 percent to $321 billion. That suggests the shift from software licensing to cloud subscriptions isn’t creating a “net loss” in the market. On the contrary, cloud business is booming over Microsoft and even IBM is seeing some upside with its cloud and SoftLayer businesses.

What it means to VARs and MSPs: Keep an eye on an M&A feeding frenzy. IT consulting firms focused on Salesforce.com, Microsoft Dynamics (CRM and ERP) WorkDay and other SaaS applications are in high demand.

The Good, Part II: Data Center Systems

Data center systems spending will grow 2.1 percent to $175 billion, led by enterprise network equipment spending. No doubt, hyper-converged systems will experience considerable upside. And all the big players — Cisco Systems, Hewlett-Packard Enterprise, etc. — are jumping in.

What it means for VARs and MSPs: Leaders like Presidio are upbeat about hyperconverged technologies like Cisco HyperFlex. Here’s why:

Did we miss a hot niche that you’re addressing? Send me email. Tell me more. Joe@AfterNines.com.

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