Enterprise software spending will set pace of IT spending in 2014

Here’s something that should make Microsoft(s msft), Oracle(s orcl) and Salesforce.com(s crm) smile when they’re not busy beating each others brains in: enterprise software is expected to lead the charge in IT spending next year.  Market research firm Gartner(s it) forecast spending in that category to grow a respectable 6.8 percent to $320 million billion in 2014 from $300 billion last year.

Overall, the research firm expects worldwide IT spending to grow 3.1 percent year over year to hit $3.8 billion trillion next year. Within the enterprise software category, spending on customer relationship management (CRM) and supply chain management (SCM) to lead the charge as companies update their systems to provide better customer service. This again should come as welcome news to Salesforce.com, Microsoft, Oracle and SAP, all of which compete in those arenas.

“Business-to-consumer” companies are investing to provide a superior customer experience for shoppers and data analytics is a key piece of that,” John Barber, managing VP for Gartner said. “In supply chain management (SCM), the goal is to save money but also to drive inventory optimization again so the customer gets the product they want faster.”

Gartner’s numbers are lower than earlier Forrester Research predictions that IT spending will grow 6.2 percent next year, although as ZDNet’s Larry Dignan pointed out Gartner factors in spending on telecom gear where Forrester does not.  Gartner expects spending on telecom services to grow slightly ( 1.2 percent) year over year.

Enterprise software is seen as less glamorous and glitzy than consumer software, but fact is, it’s what runs our universe. In October, outgoing Microsoft CEO Steve Ballmer and CEO-candidate Satya Nadella both pledged to prioritize enterprise software going forward.

There was no mention of cloud in Gartner’s news release, but as Barber put it, cloud is such a big and integral part of all these segments, it makes no sense to break it out.


Feature art courtesy of Shutterstock user David Mail

Note: Numbers updated to reflect billions versus millions.