Overall IT spending increasing in 2014, but federal IT to remain stagnant

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Estimated worldwide spending growth for IT in 2014 was downgraded by half a percentage point compared to third-quarter predictions in a new study released today by Gartner.

IT spending is still expected to grow 3.1 percent, despite the drop, totaling $3.8 trillion for the upcoming year.

“A downward revision of the 2014 forecast growth in spending for telecom services — a segment that accounts for more than 40 percent of total IT spending — from 1.9 percent to 1.2 percent is the main reason behind this overall IT spending growth reduction,” Richard Gordon, managing vice president at Gartner, said in a statement.

The increase comes after a slow 0.4 percent year of growth in 2013. Enterprise software is planned to grow the most in 2014, increasing by 6.8 percent.

The worldwide market growth projected for 2014 is not expected to spill over to federal IT contractors, according to Alan Chvotkin, executive vice president and counsel at the Professional Services Council.

“[The increase] is not the trend I would expect in the federal marketplace,” he said. “We have seen, in the past two years, relatively flat spending.”

Part of the reason for the lack of spending has the federal shift to purchasing solutions as a service. Instead of buying equipment, the government purely buys the service it needs from companies.

“There is no upfront cost when you buy as a service,” Chvotkin said. “Just think of buying gas at a gas station; you want 20 gallons and that’s all you pay for — you don’t worry about buying the pump and the tank.”

This practice has been a little harder on telecommunications, according to Chvotkin.

The government has switched to buying services because the cost of buying and maintaining equipment is expensive. Additionally, the government has trouble retaining people with the skills to do the necessary jobs, so it contracts out the work instead.

Gartner is expecting 4 to 5 percent annual growth in IT until 2017.

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Alan Chvotkin, gartner, Government IT News, richard gordon, Tech, workforce
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