Skip to main content

How Cloud and AI Influence IT Investment Strategy

The pace of change from a traditional capital-intensive IT infrastructure model to a more flexible hybrid multi-cloud services model is influencing enterprise spending trends across the globe.

Worldwide IT spending is forecast to total $3.79 trillion in 2019 -- that's an increase of just 1.1 percent from 2018, according to the latest global market study by Gartner.

IT Infrastructure Market Development

"Currency headwinds fueled by the strengthening U.S. dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter," said John-David Lovelock, vice president at Gartner. "Through the remainder of 2019, the U.S. dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars."

In 2019, technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down.

According to the Gartner assessment, successful IT product managers in 2020 will have had a long-term view of the changes made in 2019.

The data center systems segment will experience the largest decline in 2019 with a decrease of 2.8 percent. This is mainly due to the expected lower average selling prices (ASPs) in the server market driven by adjustments in the pattern of expected component costs.

Moreover, the shift of enterprise IT spending from traditional (non-cloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market.

In 2019, the market is forecast to reach $427 billion -- that's up 7.1 percent from $399 billion in 2018. The largest cloud shift has so far occurred in application software.

However, Gartner expects increased growth for the infrastructure software segment in the near-term, particularly in integration platform as a service (iPaaS) and application platform as a service (aPaaS).

"The choices CIOs make about technology investments are essential to the success of a digital business. Disruptive emerging technologies, such as artificial intelligence (AI), will reshape business models as well as the economics of public- and private-sector enterprises. AI is having a major effect on IT spending, although its role is often misunderstood," said Mr. Lovelock.

Outlook for AI Applications Spending Growth

Gartner believes that AI is not a product, it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry.

Gartner’s AI business value forecast predicts that organizations will receive $1.9 trillion worth of benefit from the use of AI this year alone.

Popular posts from this blog

Climate Change Benefits from The Circular Economy

The COP26 Summit (in Glasgow, Scotland)  brought parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. Meanwhile, the circular economy is a key sustainability strategy adopted by industry leaders in their efforts to achieve progress. While the circular economy is still in its infancy in terms of data and metrics, it's a growing phenomenon where technology sectors -- such as the Internet of Things (IoT) for asset tracking -- are set to grow rapidly within the next five years. Global technology intelligence firm ABI Research forecasts that the world will achieve over 10.5 percent circularity by 2030, as sustainability efforts and incoming legislation start to take effect. Circular Economy Tech Market Development "The circular economy is an often-misunderstood concept that goes much further than waste management and can become a blueprint for cities. It is a movement away from our take-make-waste economy

Business Technology for The Anywhere Workspace

The COVID-19 global pandemic fueled the trend of pushing executives outside of their comfort zone, while government-mandated lockdowns required their knowledge worker employees to work from home. Companies that previously avoided 'Flexible Working' models were forced to embrace the pervasive trend in a matter of weeks, as new remote working policies became a CHRO standard practice. As we enter 2022, more employers will empower their key employees to work wherever they desire and engage with customers whenever and however they prefer. Moreover, the ongoing transformation to an 'Anywhere Workspace' will drive strategic IT spending and advance cloud-based SaaS adoption. Business Technology Market Development Global enterprise IT spending is projected to total $4.5 trillion in 2022, an increase of 5.5 percent over 2021, according to the latest worldwide market study by Gartner. "Enterprises will increasingly build new technologies and software, rather than buy and imp

Guidance for Leading Digital Business Value Creation

In today's environment where business technology is a key enabler of competitive advantage, CEOs need to be sure that someone is confidently leading digital business growth across the organization. The default is the Chief Information Officer (CIO) role. According to the latest worldwide market study by Gartner, in order to accelerate business value creation, CIOs and other IT executives should focus on three key areas -- leading from anywhere, nurturing connections, and reaching beyond. Mbula Schoen, senior research director at Gartner , said that as organizations continue to emerge from the disruption of the COVID-19 pandemic, CIOs and IT executives will need to generate value in fundamentally new ways. Business Technology Market Development Gartner forecasts that by the end of 2022, the share of knowledge workers working remotely will increase to 47 percent -- that's up from 27 percent in 2019. However, simply moving from onsite to remote is not the destination but merely a