2016 predictions 1 – The world ITC market declines by 1.2% to $5.8 trillion

In 2015 the market declined by 5.1%, so its unlikely to see a recovery in the year. My forecast is for a 1.2% decline, with the market reaching $5.8T. Performance by category will vary. In particular:

• Software will grow 4.2% to $916B: although it lags in revenues, it will continue to delivery the highest profitability of all 4 categories
• IT service will grow by 0.6% to $1.6T; the fastest growing segments will be IaaS and PaaS, although they will be only a fraction of the total revenue
• Hardware will remain level at $1.2T; the decline in PCs and printers will be steeper than smart phones and tablets; wearables and 3D printers will grow fastest
• Telecom service will decline by 1.3% to $2.1T; successful vendors will improve their efficiency and profitability by investing in virtualisation

All-in-all it’s not going to be a great year: the lack of growth will drive even more merger and acquisition activity than in 2015.

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