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Rising US $ to hit IT Spending, Predicted to Decline 3.5% in 2015

Rising US $ to hit IT Spending, Predicted to Decline 3.5% in 2015
Anurag Gupta, research vice president at Gartner

Gartner predicts worldwide IT spending across vertical industries to total $2.69 trillion in 2015, a 3.5 percent decrease from 2014. Analysts said the rising U.S. dollar is chiefly responsible for the slowdown.

“Appreciation of the U.S. dollar (mainly against the euro, yen and the ruble), along with the relative slowdown of emerging markets (particularly Russia, Brazil and China), had a double impact on IT spending in 2015, and explains the downward revision in the forecast,” said Anurag Gupta, research vice president at Gartner. “Unsurprisingly, most technology firms reporting revenue in U.S. dollars have taken a negative hit on their quarterly revenue earnings.”

Although all industries are expected to experience negative growth in 2015, given currency exchange rates, Gartner’s projections for the top three growth industries are consistent with the previous quarter’s forecast, with retail, banking and securities, and healthcare providers leading industry growth (see Table 1).

IT spending in the retail sector is forecast to decline 1.5 percent in 2015. Technologies that help understand customers better, improve engagement through multichannel experience and facilitate the buying process are high-priority areas. Within stores, creating IT infrastructure to accept various mobile payment systems and digital wallets will be high-priority items in the second half of 2015. We also see continuing infrastructure investments in new point of sale (POS) terminals, as merchants in many countries comply with the October 2015 deadline to convert to new systems, whereby, the liability will shift from credit card issuer (such as Europay, MasterCard and Visa [EMV]), to merchants for accepting nonchip, PIN-based cards.

Even as IT spending in the banking and securities segment is forecast to decline 2.4 percent in 2015, Gartner expects banks in developed markets to double their IT budgets to support digital and other new technology initiatives through 2019 while reducing legacy maintenance, to sell products, service customers and reduce operational costs.

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