Worldwide IT spending in decline
Global IT spending will shrink 5.5% to $3.5 trillion in 2015 because of a strong US dollar, CIOs delaying hardware upgrades and companies embrace more software-as-a-service offerings.
"We want to stress that this is not a market crash. Such are the illusions that large swings in the value of the US dollar versus other currencies can create," said John-David Lovelock, research vice president at Gartner. "However, there are secondary effects to the rising US dollar. Vendors do have to raise prices to protect costs and margins of their products, and enterprises and consumers will have to make new purchase decisions in light of the new prices."
Communications continues to be the largest IT spending segment, worth $1.49 trillion in service revenues, but down by 7% on the previous year’s $1.61 trillion because of price erosion and increased competition. Revenues for IT services ($914 billion, down 4%) and revenues for devices are also down, as companies delay replacements of PCs, despite the Windows XP phase out. IT services revenues ($654 billion, down 6%) are being hit by the move to cloud services which have less integration and consulting fees.
Facebook beats Google to US mobile eyeballs
Despite being slow to develop its mobile strategy, Facebook’s mobile apps are used more that Google’s, which has invested so heavily in mobile. According to Forrester Research, the total time that US mobile users spend on Facebook, Instagram, Messenger and WhatsApp exceeds those of Google Search, Maps, Gmail, YouTube, Chrome and Calendar. Forrester says Mark Zuckerberg has been willing to "fail fast and learn fast — even publicly," which demonstrates his strong leadership and vision.
Facebook owns 13% of the time US smartphone users spend in apps, while Google owns 12%, according to Forrester. The rest of the big players in mobile — Apple, Amazon, Microsoft, and Yahoo — only own between 1-3% of that time each. Enterprise apps account for 8% of minutes spent in apps.
Falling hardware costs and cloud adoption driving M2M adoption
451 Research estimates that cellular Internet of Things (IoT) and machine to machine (M2M) connections will increase nearly four-fold globally from 252 million in 2014 to 908 million in 2019. Hardware and bandwidth costs have dropped to a point where nearly every enterprise can reap the benefits of virtualizing the physical world. Second, cloud-based middleware and data platforms are making it easier to securely generate insights from machine data at greater scale than ever before possible. Last, the buzz around this topic is generating overall awareness of the transformational potential of IoT/M2M in terms of ROI, competitiveness and support of completely new business models.
And in a separate report by GSMA Intelligence, China is believed to be the world’s largest M2M market with 74 million M2M connections at the end of 2014, representing almost a third of the global base. Researchers forecast this figure will grow to 336 million by 2020, representing a compound annual growth of almost 29 percent.