Driven by increased Cloud adoption, worldwide IT spending is projected to total $3.8 trillion in 2019, an increase of 3.2 per cent from expected spending of $3.7 trillion in 2018, according to the latest forecast by market research firm Gartner. Global spending for devices — PCs, tablets and mobile phones — is forecast to grow 2.4 per cent in 2019, reaching $706 billion, up from $689 billion in 2018, the report said.
“While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast,” John-David Lovelock, Research Vice President at Gartner, said in a statement on Thursday.
“What this signals, for example, is more enterprise use of Cloud services? instead of buying their own servers, they are turning to the Cloud,” Lovelock said.
Enterprise software spending is forecast to experience the highest growth with an 8.3 per cent increase in 2019. Software as a service (SaaS) is driving growth in almost all software segments, particularly customer relationship management (CRM), due to increased focus on providing better customer experiences. Cloud software will grow at more than 22 per cent this year compared with six per cent growth for all other forms of software.
While core applications such as ERP (enterprise resource planning), CRM (customer relationship management) and supply chain continue to get the lion share of dollars, security and privacy are of particular interest right now. The report noted that 88 per cent of recently surveyed global CIOs have deployed or plan to deploy cybersecurity technology in the next 12 months. In 2018, data centre systems are expected to grow six per cent, buoyed by a strong server market that saw spending growth of more than 10 per cent over the last year, and in 2018 will come in at 5.7 per cent growth.
However, by 2019 servers will shift back to a declining market and drop one per cent to three per cent every year for the next five years, the report said. This, in turn, will impact overall data centre systems spending as growth slows to 1.6 per cent in 2019, it added. IT services will be a key driver for IT spending in 2019 as the market is forecast to reach $1 trillion in 2019, an increase of 4.7 per cent from 2018.
“As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business,” Lovelock said.
Gartner’s IT spending forecast methodology relies heavily on analysis of sales by thousands of vendors across the entire range of IT products and services. The market research firm said it uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.