The cost of sales force automation software is set to drop by 25% according to the latest forecast from Gartner.
The Gartner Worldwide IT Spending Forecast estimated enterprise software market will total $335bn this year, a 5.5% increase from 2014.
The analyst noted that price erosion and IT supplier consolidation in 2015 will lead to fierce competition between cloud and on-premises software providers.
As such, Gartner predicted that, in the customer relationship management (CRM) market, seat prices for segments such as sales force automation (SFA) could decline by as much as 25% by 2018.
With cloud licensing set to plummet, on-premises software providers are likely to discount their cloud offerings heavily to try to maintain their customer base, according to Gartner.
Gartner expected there will also be increased price competition from cloud offerings in database management system (DBMS), application infrastructure and middleware – although these areas of software would not be impacted by price as much as CRM.
Gartner’s forecast also highlighted that the global reduction to software support services would reduce IT services expenditure through 2018, because of lower growth rates expected for enterprise software. Overall, Gartner expected IT services expenditure to grow 2.5% in 2015.
Worldwide IT Spending Forecast (Billions of US Dollars)
Data Center Systems
Source: Gartner (January 2015)
Datacentre systems spending is projected to reach $143bn in 2015, a 1.8% increase from 2014.
Growth in enterprise communications applications and enterprise network equipment is set to increase while growth for the servers and external controller-based storage segments has dropped. These growth fluctuations are due to extensions in replacement life cycles and a higher than previously anticipated switch to cloud-based services, Gartner said.
In July 2014, Gartner predicted mobile devices would increase by 6.5% in 2014 to $740bn, compared to $695bn in 2013. For 2015, the analyst expects device spending to increase by 5.1%.
Last week analyst Forrester predicted technology spending would rise by a modest 5.3%, but most IT spending would still go on maintaining existing systems.
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