The worldwide IT spending in 2020 has been projected to total $3.9 trillion which has increased from that of 3.4% in 2019. Inc. Global IT spending is likely to cross $4 trillion territory next year as per the latest forecast by Gartner.
John-David Lovelock, distinguished research VP at Gartner reportedly said that due to certain political uncertainties although the global economy has been pushed closer to recession but fortunately nothing of this sort occurred in 2019 and neither there is any such expectation in 2020 and beyond. He also suggested that such uncertainties have led to redoubling investments in IT because they anticipate growth in revenue, but their spending patterns continue to shift.
Software will turn out to be the fastest-growing major market in 2020 and its growth would reach double-digit at 10.5%. Lovelock reportedly stated that nearly all the market segments with enterprise software seem to be driven by the adoption of SaaS. They expect spending on software forms which are not cloud to continue to grow, though at a slower rate. Of course SaaS will be gaining more spending but licensed-based software will continue to be purchased and its utilization expanded through 2023.
Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)
|2021 Spending||2021 Growth (%)|
|Data Centre Systems||205||-2.7||208||1.9||212||1.5|
Source: Gartner (January 2020)
Companies with high percentage of IT spending working on cloud adoption represents where the next-generative, disruption business models are likely to evolve. The increase in enterprise IT spending for cloud-based offering will be eve n faster than growth in non-cloud IT offerings (traditional) through 2020.
Last quarter the ‘and’ dilemma got introduced by them where enterprises get the challenges of cutting costs simultaneously while investing for growth. An example of the way this dilemma gets alleviated is Maturing Cloud Environments: The companies can look forward for a better return on their cloud investments with the help of cost savings, improved innovation and agility along with better security. There’s hardly any chance of this spending trend to fade away anytime soon.
The headwind which comes from a strong US dollar has turned into a barrier to IT spending on devices as well as data center equipment in effective countries.Even after the last quarter witnessing the sharpest decline within the device market considering all segments, it is expected to return to overall growth in 2020 because of the adoption of less expensive and new phone options from countries which are developing and emerging. Lovelock reportedly mentioned that the approximate $10 billion growth in device spending in Emerging Asia/Pacific and Greater China is beyond enough to offset the expected declines in Latin America and Western Europe.
The IT spending forecast methodology at Gartner depends heavily on meticulous analysis of sales by thousand of vendors covering the entire range of IT products and services. Primary research techniques well complemented by secondary research sources are used by Gartner in order to build a comprehensive database of market size data over which it forecasts relies.
The Gartner quarterly IT spending forecast is known for delivering a unique perspective on IT spending across software, hardware, telecommunications and IT service segments. The clients at Gartner are guided by these reports which help them understand the market opportunities as well as market challenges.
Lovelock is likely to provide more analysis on the key drivers of the IT market at the Gartner Tech Growth & Innovation Conference which will be held on May 11-13 in San Diego, CA and on May 18-19 in UK.