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Forrester predicts a cracking two years for software spending

A new report from Forrester has predicted that software sales will grow significantly over the next two years, due to organisations stepping up their cloud and software-as-a-service (SaaS) adoption in 2016 and 2017.

The analyst expects software spending to rise to $640 billion (£439bn) worldwide in 2017, an increase of nearly 10 per cent.

As well as as cloud software and services driving this growth, Forrester's Global Tech Market Outlook For 2016 To 2017 report also said that analytics will play a key role, with business intelligence products and cognitive technologies contributing to software sales.

Andrew Bartels, Forrester principal analyst, said: "If software is where all the action is, hardware is the backwater of old technology."

"Computer equipment will show some signs of life, as tablets and Windows 10 PCs attract increases in spending. But sluggish demand for servers and storage devices will keep 2016 growth at 2.4 per cent in US dollars (3.2 per cent in local currency terms) and a bit better in 2017."

In terms of the sales breakdown, Forrester expects applications to make up the bulk of spending at $314 billion (£215bn), with custom software and mobile apps developed by contractors accounting for $87.1 billion (£59.7bn) and $17.5 billion (£12bn) respectively.

The report also predicts growth in IT services spending by 5.3 per cent to $541 billion (£371.1bn) and telecommunications spending by 6 per cent to $647 billion (£443.9bn) in 2017.

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