"Budgets are restricted and server infrastructure spending is clearly not the highest priority for many organizations," added Adrian O'Connell, research director at Gartner.
Despite the gloom hanging over segments of the hardware market, there is an underlying optimism that appears to be driving tech. While PC and server sales decline, smartphone and tablet sales are rising.
Tablet shipments are in line to increase 58.7 percent year over year in 2013, reaching 229.3 million units, IDC said in a report this week. The market research company said tablet shipments will surpass those of portable PCs this year. What's more, IDC expects tablet shipments to outpace the entire PC market, including portables and desktops, by 2015.
"What started as a sign of tough economic times has quickly shifted to a change in the global computing paradigm with mobile being the primary benefactor," said Ryan Reith, program manager for IDC's Mobility Trackers. "Tablets surpassing portables in 2013, and total PCs in 2015, marks a significant change in consumer attitudes about compute devices and the applications and ecosystems that power them. "
Outside the hardware market, industry insiders are optimistic about cloud-related technology. This year, U.S. tech executives continue to show moderate optimism about revenue growth, according to the annual Technology Business Outlook report from tax and financial advisory firm KPMG.
Just under 80 percent of the executives questioned by KPMG expect their company's revenue to increase over the next year, compared with 77 percent in last year's results, according to the survey, which polled U.S.-based technology company executives. "More than half say SaaS is the main driver of cloud revenue, while almost a third cites mobile applications and mobile platform as the two main mobile revenue drivers," noted Gary Matuszak, head of KPMG' s Technology, Media and Telecommunications practice.
"Cloud and mobile are continuing to drive innovation and competitive leadership in the tech sector," he added. "Revenues are materializing as cloud and mobile continue to become key technology platforms for a number of industries and adoption is growing in countries and businesses where there is less legacy IT infrastructure."
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