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Friday, September 06, 2019

Worldwide IT Spending will Reach $3.74 Trillion in 2019

What's driving the growth of Information Technology (IT) applications, and why are senior executive buyers so opinionated about the most effective IT investment strategy? Digital business transformation is on the agenda of every forward-looking enterprise. Leaders in the C-suite are key decision-makers.

Global IT spending is projected to total $3.74 trillion in 2019 -- that's an increase of just 0.6 percent from 2018, according to the latest worldwide market study by Gartner. Note, this forecast is slightly down from the previous quarter’s forecast of 1.1 percent anticipated growth.

Information Technology Market Development

"Despite uncertainty fueled by recession rumors, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019," said John-David Lovelock, vice president at Gartner. "While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019."

Regardless of the ongoing tariff war, North America IT spending is forecast to grow 3.7 percent in 2019 and IT spending in China is expected to grow 2.8 percent. Global leaders will continue to invest in strategic projects that deliver a competitive advantage. However, future growth is somewhat uncertain.

"Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur," said Mr. Lovelock.

The enterprise software market will experience the strongest growth in 2019, reaching $457 billion -- that's up by 9 percent from $419 billion in 2018. Gartner says some CIOs are continuing to rebalance their technology portfolios, shifting investments from on-premises to off-premises capabilities.

IT investment patterns continue to evolve. As cloud computing becomes increasingly mainstream over the next few years, it will influence ever-greater portions of enterprise IT decisions -- in particular, system infrastructure. Hybrid multi-cloud computing scenarios will gain momentum.

Prior to 2018, more of the cloud computing opportunity had been in application software and business process outsourcing. Over this forecast period, it will expand to cover additional application software segments -- including office suites, content services and collaboration services.

Globally, consumer device spending as a percentage of total spend is dropping every year in every region due to saturation and commoditization, especially with the desktop personal computer (PC), notebook computers and media tablet devices.

Outlook for IT Spending Priority Transitions

Cloud applications allow these personal computing devices to have an extended life, with less powerful technology needed to run new software applications in the cloud. This is why the devices market will experience the strongest decline in 2019 -- estimated to go down by 4.3 percent to $682 billion in 2019.

"There are hardly any ‘new’ buyers in the devices market. The market is now being driven by replacements and upgrades," said Mr. Lovelock. "Add in their extended lifetimes of PCs along with the introduction of smart technologies and IoT, and device spending only continues to drop."