The IT and communications (ITC) market fell by 2.0% in Q2 2017 to $1,517 billion as the increased nationalism around the world takes its toll on the most global of all markets. At a major country level (see my Figure above) India and Japan performed best, with growth rates of 14.4% and 10.3% respectively. The USA is by far the world’s largest market for ITC products and services at $1.8T; however spending there grew by just 0.4% in the quarter. Spending in China was $436B, making it the 3rd largest in the world; however spending there declined by 4.1% in the quarter. By far the worst performing country market was the UK, where the declining value of the Pound and the business uncertainty created by its decision to leave the EU led to a 13.6% decline – making it the ‘poor man of the world’ – not just ‘Europe’.
At a continental level (see my Figure above) the strongest growth in the year to the end of June was the Middle East, where spending increased by 12.1%; second was Asia Pacific, which achieved growth of 5.8% in the year. Easter Europe grew by 2.2% and the Americas by 1.1%. Western Europe – dragged down by the economic crisis developing in the UK – fell by 2.1%, while Africa was the worst, declining by 5.6% in the year.
Global ITC spending ($US billion) by category – Q2 2-17
| Spending ($B) | Growth % | |
| Hardware | $272 | 0.5% |
| IT Service | $480 | 3.5% |
| Software | $223 | -4.9% |
| Telecom Service | $542 | -6.5% |
| Total | $1,517 | -2.0% |
Source: ITCandor, 2017
Broken down by category (see my Table) IT services performed best (+3.5%), driven on by significant spending on IaaS and PaaS cloud services. Hardware sales grew by 0.5% worldwide – a poor result given the number of new processors and storage devices launched recently. Surprisingly software sales declined (-4.9%) due to only modest growth of SaaS and a significant number of recent merger and acquisition activities. The worst performing area was telecom service, where spending fell by 6.5% in the quarter.
Nothing much has changed in terms of ITC market shares (my Figure shows both the quarterly and annual result). Apple had a significant lead in both; in fact its revenues were larger than the total ITC spending in each country of the world apart from the top 7 in the year. Of the other leaders AT&T, Verizon and NTT are of course primarily telecom suppliers, while Samsung is a client device – and HP (although splitting and offloading most of its services and software into separately named and managed parts) a full-range – IT supplier.
Of course this is just a précis of the top line results of ITCandor’s Q2 research. Let me know if you’d like to learn more about how we can help with your business plans.