Summer is flying by – Gartner has already trimmed its annual projections for worldwide information technology spending.

Why this keeps happening, however, is a story of something very particular: In the current tech transition, analysts are scrambling to figure out how money and technology need now work together.

“Frankly, it’s gotten extremely difficult,” said John-David Lovelock, research vice president at Gartner. “The things we looked at in 2009 or 2010 aren’t the things we’re seeing now. “

The change that is making his job hard, Mr. Lovelock said, is how quickly we are moving to what he called “the Third Age” of IT.

In his view, the first age, from about 1980 to 2000, was one of “IT craftsmanship — we were building computer systems, moving off paper-based payroll and accounting with massive IT departments.”

Next, Mr. Lovelock said, was “IT industrialization. It was all about how we can optimize efficiency.” That began in 2000, and is starting to end.

In the so-called Third Age, “we’re moving to a world of digital-based businesses,” the analyst said. “Technology isn’t serving an existing business, it’s dictating what a business is.” That is one reason tech spending still grows overall even as it gets cheaper in so many ways: It is needed in more places.

Some of the changes in buying would seem relatively easy to spot, like the move from personal computers to tablets, or from computer servers and software to cloud computing systems.

Below the surface, however, things are more complex. Tablets are generally more expensive than basic PCs, for example, but they permit a vastly larger number of organizational systems and can be used with cloud systems in many ways. There are few new buyers for high-end tablets and smartphones, meaning there is increased competition for less expensive devices.

Over years of paying subscriptions, cloud software can seemingly cost as much as a software license, but using a cloud service can make it easier for companies to cut staff or redeploy workers to making new kinds of software. Cloud-based data storage is seeing lots of price cutting, too, and the big players are scrambling to add features.

What is striking is that, in a period of reasonably modest but stable business conditions for most of the big developed economies, technology spending seems to require less capital than even people close to the matter assume. How it gets used, from sensors to the biggest data centers, may be an even bigger mystery.

“It comes down to a much earlier commoditization than we projected,” Mr. Lovelock said. That will end eventually, he said, perhaps more out of hope than evidence.

“It has to stabilize,” he said. “People will realize they can only take price cutting so far.”

Source: bits.blogs.nytimes.com