0 source deutsche bank global economic perspectives

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Key comments by industry experts on CY14E IT spending by customers IT Research and advisory firm Comments and forecasts 1. CY14 worldwide IT spending is projected to grow by 3.6% yoy vs. 0.8% (2.8% in constant currency) growth in CY13E Gartner 2. Global IT services is expected to register growth of 4.9% in CY14 vs. 4.5% (constant currency) in CY13 3. In USD terms, the IT services market will exceed USD 1.1 trillion in 2017 and outsourcing will contribute 60% of the market growth 1. Worldwide IT spending is expected to accelerate in CY14 to about 5% in CY14 against 4.6% growth in CY13 IDC 2. Excluding mobile phone shipments, the growth in tech spending in 2013 was just 2.6% in constant currency. With mobile phones shipments forecast to come off in 2014, growth rates are expected to converge. 3. Software, technology infrastructure and services will lead the growth in CY14. 4. With the macroeconomic recovery, the only headwind for traditional IT services is cannibalization by cloud. 1. Customers are balancing switching costs and risks with significant improved service delivery and meaningful cost reduction. 2014 should be a record year for customers changing providers. TPI 2. Contracts expiring in 2014 are up by 4% yoy over 2013. 3. Forty seven percent of the expiring contracts by TCV (total contract value) are from Europe in 2014. Source: Gartner, IDC and TPI Deutsche Bank AG/Hong Kong Page 9 7 January 2014 Software & Services Indian IT Services We believe pent-up demand for software and hardware refresh will be one of the primary reasons for improved spending in 2014. IDC forecasts that pent-up demand for software is likely to be quite high in 2014 due to a high installed base. This will have a pass-through on services though the pass-through to services is not very strong as it happened earlier due to cannibalization by cloud. Spending on tech infrastructure will stage a comeback in 2014 in terms of servers and storage refresh cycle. For example, commercial PC sales in the US have staged...
View Full Document

This document was uploaded on 02/06/2014.

Ask a homework question - tutors are online