At the end of last week Lenovo announced its intention to acquire Infinidat for an undisclosed sum. It’s an important move which will enhance its role as an international enterprise server and storage systems vendor in a challenging year. Read more »
ITCandor’s 2025 Predictions – profits surge in a stable market
It’s that time again for me to make predictions for the coming 12 months. It will be a year dominated by politics and conflict. In particular Trumps’s second presidency will see the introduction of tariffs and taxes that will distort and restrict the natural growth of many ITC markets in most countries and regions. I hope that we’ll see peace declared somewhere, be it in Ukraine, Sudan, Gaza, Lebanon and/or Israel and that the overthrow of Assad in Syria will herald a respite for its citizens: who knows, it could even be the precursor to the overthrow of Putin in Russia. Although hopeful for peace, I expect war to continue, amplified by advanced technology in drones and missiles and accompanied by state-sponsored cyber-attacks on military and civilian infrastructure. Read more »
1. ITC net profits surge 13%, total spending level at $7.5T
My first prediction for 2025 is that the total spending will be the same as in 2024 at $7.5 trillion. The ITC market will employ 22.5 million at the end of the year – also much the same as at the end of 2024. The big change will be a surge in net profit, which will grow 13% to $1.2 trillion. I expect new tariffs will increase prices in most countries, reducing demand for new products and extending the life of older ones. This downward pressure will be stroner than the revival in server, PC, tablet and smart phone hardware markets. I expect annual Cloud computing (IaaS/PaaS/SaaS) spending growth to be below 10% for the first time since its inception.
2. ITC spending will grow in Asia Pacific, but decline in the Americas and EMEA
My second prediction is about the regional growth of ITC spending. I expect spending in the Americas and EMEA to be much the same as this year – flat at $3.0 and $2.3 trillion respectively. However I predict that the market in Asia Pacific will grow 7% to reach $2.1 trillion in the year, closing the gap with EMEA. Beyond 2025 the Americas and Asia Paific will see growth while EMEA will flat-line. New tariffs imposed by President Trump andas reactions to them will reduce spending growth in all regions.
3. ITC spending in China will grow most in 2025
At a country level I expect China to see the mkost spending growth (9%). There will also be spending growth in many other Asian Paific countries. Most EMEA countries, apart from the Czech Republic, Poland and Nigeria, will see a slight decline in ITC spending in comparison with 2024 levels – as will the USA and most other American countries. The worst performance in terms of spending will be in Brasil, Spain and the UAE.
4 Hardware spending will stay ahead of Software in 2025
Of the four mutually-exclusive ITC categories it has often been predicted that spending on software will overtake hardware at some point. I don’t think it’s going to happen in 2025 because, despite the introduction of new operating systems by Microsoft and Apple, there has been a boom in GPU and server sales, as well as a resurgence in PC, tablet and smart phone sales in 2024. I expect that the software market will eventually overtake the hardware market – but not before 2026. As for the other categories, I expect IT service to ontinue to grow and telecom service to decline – both mildly in 2025.
5 Spending on servers will grow most – on peripherals least – in 2025
Of the 40 plus offerings making up the 4 categories, spending will vary greatly in 2025. Instead of seeing the three cloud computing offerings lead as in many previous years, 2025 will see servers at the top with a 10% growth to $112 billion. The worst performing offerings will be gaming consoles (-9% to $24 billion), disk drives (-10% to $9 billion) and peripherals (-12% to $148 billion). I expect all four offerings in the telecom service category to decline in the year.
6 Trade tariffs reduce the growth of the ITC market
Having won the 2024 US election to run for his second term, President Trump has already indicated his desire to introduce new strong import taxes on the rest of the world. Although the ITC industry is dominated by US vendors and is by far the largest country market, it has essentially been a global market for many years. No one wins a trade war. I expect Trump’s new taxes will restrict the spending on ITC offerings in almost all countries – including the USA. Particularly at risk is the manufacturing specialization in China and the thousands of patents held by US-based organizations. The EU market is also at risk, given its declining role in the ITC market over the last 10 years. There will be many unplanned-for price hikes during the year as a direct result of new tariffs.
7 Generative AI bites into the white-collar workforce
IT and communications offerings are a mixture of tools to improve productivity and automation to reduce headcount. In the case of generative AI the world is still amazed at the extent to which computers can now produce semi-human (and sometimes super-human) results. At the beginning of the Internet age we learnt that computerized help is ten times cheaper than human intervention. The difference with AI is that it is becoming harder to differentiate between humans and machines. I predict that there will be major industrial action taken by trades unions and individuals during 2025 to counter the rush to deploy those AI systems that replace humans. I predict that resistance will take the form of new luddites, eager to disrupt the IT systems of those organizations that do most to exploit the use of AI to reduce their workforces.
8 Users rush to adopt quantum-safe code as criminals hack AES-256 encryption
Quantum computing is on the rise. 2024 saw new chips from IBM (Heron) and Google (Willow), as well as an increase in the number of systems and cubits available to programmers. Unfortunately in consequence bad actors are now also capable of utilizing quantum computers to do mischief. Since the majority of legal certificates and documents are now held digitally, rather than pieces of paper held in safes, we may be subject to a new, even more serious, cyber attacks. Imagine being told that you house doesn’t belong to you because someone managed to access and change the ownership of your deeds. In 2025 I expect that there will be a number of publicized thefts of heavily encrypted data sets through the use of quantum computing by criminals. As a result I expect many large organizations to invest in new ‘quantum-safe’ encryption.
9 Data center carbon emissions surge – can we eliminate spurious workloads?
Data centers consume massive amounts of energy – much of it far from Green. Much of the energy is made up of hosting speculative and spurious workloads including social media, bitcoin mining, gambling and porn. The addition of AI inferencing added even more to these in 2024. The will be no respite from the negative effect this has on the Earth’s growing temperature rise in 2025. My prediction (or at least hope) is that governments will attempt to eliminate some of the most spurious workloads in 2025. They can also help by tightening up carbon emission audits and investing heavily in renewable energy resources. If not the ITC industry will be guilty to having contributed to Climate Change rather than provide the means of controlling it.
10 Governments begin to restrict and even ban social media companies
In 2024 a number of countries considered barring the use of smart phones in school classes, while others attempted to restrict their publication of dangerous information used by terrorists and those considering harming themselves and/or others. Many of these companies such as TikTok, Facebook, X (Twitter), Instagram have been slow to take down offending images and stories. While political parties were successful in limiting the distortion social media had on major elections in 2024, it’s time governments take stronger action to limit the power of social media. In 2025 I expect to see more bans on social media and smart phones in secondary schools and a reappraisal of the effects these (usually foreign) companies have on their citizens. Of course many countries (mostly in the Far East) use the Internet to survielle and control their citizens. In others certain apps have been barred from the country in times of conflict. We need to do more in the West to limit the negative effect social media has when its information gets into the wrong hands.
ITCandor’s 2024 predictions – a self-assessment
Before publishing my predictions for 2025, it’s time to appraise those made for this year – which saw a strong spending growth – especially on servers and GPUs for the rapidly developing AI markets. Raw storage devices (HDDs, NAND and DRAM chips) also saw tremendous growth in spending. At 66% accuracy, there was no major improvement from last year. Please find my appraisal of each of the 10 predictions below.
| No. | My top 10 predictions | Score | Comment |
| 1 | The total ITC market will see zero spending growth, remaining level at $7.1 trillion as war and terrorism escalate | 2 | The market will actually grow by 3% to $7.5 trillion – driven by the purchasing of AI servers and a renewal of PC and smartphone markets.. |
| 2 | ITC spending growth will be bigger in Asia Pacific; EMEA will perform better than the Americas | 2 | In current $US calculations regional growth in 2024 was 4% in the Americas, 3% in EMEA and 2% in Asia Pacific. In local currency, it was 4%, 2% and 3% respectively. |
| 3 | Of the major country markets Japan will see the strongest spending growth in 2024 | 7 | This will be true for 2024 when measured in current $US; however in local currency the market in Japan will decline by 1%. |
| 4 | Software spending growth will be stronger than in IT Services; Telecommunications and hardware sales will decline | 2 | Hardware grew 7%, IT Service 5% and Software 2%; Telecom Service declined 3% in 2024. |
| 5 | As for sales by offering – Software as a Service spending will grow most; Implementation IT services will be the largest | 7 | Spending on SaaS will be 6%, but be beaten by servers (28%), IaaS (13%) and PaaS (12%). Implementation will be largest at $840b. |
| 6 | Spending on raw storage will begin to grow again, following two years of dramatic decline. | 10 | Absolutely true. In the year to Q324 HDD, NAND and DRAM spending grew by 41%! |
| 7 | Generative AI – especially from large public cloud suppliers will continue to grow at tremendous rates | 10 | Absolutely true. Nvidia’s revenues grew by 152% and Supermicro’s by 154% in the year to the end of Q324. |
| 8 | Cyber criminals will continue to influence/interrupt/ disrupt national elections in the USA and UK | 8 | In the UK, China was named behind the theft of 40m elector records – however for a hack in 2021/2. The 2024 US presidential election was declared ‘the most cyber-secure’ to date by the CIS. |
| 9 | Quantum computing will come of age, creating analytic breakthroughs in HPC | 8 | While still a mystery to many, vendor efforts continued. IBM introduced its Heron chip and Google – its Willow. Apple introducing quantum-safe encryption. |
| 10 | War and terrorism will drive up oil prices, slow the move to green energy and negatively affect ITC supply chains | 10 | There was a escalation in Russia’s attack on Ukraine; Israel spread its attacks from Gaza to the Lebanon and Iran. |
Most importantly I significantly underestimated the spending growth of raw storage devices, AI server and GPU deployments. On balance I seem to be better at predicting world events than the details of the ITC industry – I’ll strive to do better in future!
The world ITC market grows 5% to reach $1.9 trillion in Q3 2024
As I predicted last quarter the Information Technology and Communications market continues to grow. In total revenues reached $1.9 trillion (the highest of any quarter in history) in the quarter and $7.4 trillion in the year to the end of September – up 5% and 3% respectively. Net profit, however was down 3% to $265 billion in the quarter and level at $1.1 trillion for the year. This shows that, while conflict, global warming, inflation and the slow road to recovery from the COVID-19 pandemic challenge countries, regions and governments alike, our industry is fuelling recovery. I’ll address the extent to which our market is contributing to, or helping to solve these issues in my up-coming predictions for 2025. Read more »
IBM announces Telum II – the processor for its next generation mainframe
IBM is expected to launch the replacement to its current z16 range of servers in 2025. Our first glimpse of the its next mainframe line came with its announcement of the Telum II processor at the Hot Chips conference in Palo Alto in August this year (mirroring its announcement of the original Telum processor in at the same conference in September 2021, seven months ahead of its introduction of the z16 itself in April 2022). In this post I’ll look at how the technical advancements of the new chip will stretch the lead IBM has over other server vendors even further. Read more »
IBM introduces Power Virtual Server as an on-premise pod cloud option
To maximize sales server vendors want to make their products available to customers in multiple ways. In terms of the way they are acquired, this means outright purchase, leases and pay-per-use schema. In terms of what you buy, this means Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) offerings in addition to physical servers themselves. IBM is later than its competitors in deciding to make its Power servers available as an on-premise cloud offerings – akin to HPE’s Greenlake, in the market since 2018 , AWS Outposts, which were launched at the end of 2019 and Oracle Compute Cloud@Customer launched in August 2023. In this post I’ll look at what IBM’s move and its consequences. Read more »
Raw storage spending soars by 54% in Q2 2024 – the recovery continues
I predicted a return to growth for the raw storage market back in April. Although very few of the disk drives, flash and memory components are bought by end-users, they are nevertheless essential components of laptops, desktops, smart phones, tablets, storage systems servers and other devices, making this market vitally important to our industry. In the second quarter if the year sales grew a massive 54% to $50 billion in total. Hard Disk Drive (HDD) sales grew 35% to $7.1b, NAND – by 66% to $12.3b – and DRAM, by 56% to $30.6B. In this post I’ll share my capacity and spending forecasts for coming quarters and years. As always, please contact me if you need greater details for your business planning purposes. Read more »
ITC spending reaches $1.865 trillion in Q2 2024 – the highest ever total
It may seem a long time ago, but it takes time to assess market movements. In this post I’ll pass on our findings about the size and growth of the ITC market in the second quarter (April to June) 2024. Read more »
Cloud computing – omnes nimbi divisa sunt in partes tres
I first wrote about the importance of cloud computing at the end of 2009. Since then I’ve documented its rise in 844 posts published on this site. Of course its services have become a huge component of enterprise IT. However 2023 was a pivotal year in which total sales declined for the first time – dropping 12% from $465b to $410b. Sales picked up again in Q1 2024, so it’s a great time to reappraise these services as part of the overall IT market.
The overall market is divided into three categories (to mis-quote Julius Caesar, ‘omnes nimbi divisa sunt in partes tres’). Read more »
EMEA suppliers fail to take advantage the – no longer global – network market.
Physical networking is an essential element of both the Communications and IT markets infrastructure, as well as a key part of the long-term and continuing convergence between the two. Read more »