Skip to main content

Global IT Investment will Recover to $3.9 Trillion in 2021

Any market momentum lost in 2020 for digital transformation initiatives will now be regained in 2021 as large enterprise CEOs, and their board of directors, approve IT spending acceleration.

Moreover, in anticipation of a recovery within the Global Networked Economy, savvy leaders are investing in key digital business priorities with the intent to gain a strategic competitive advantage.

Worldwide IT spending is projected to total $3.9 trillion in 2021 -- that's an increase of 6.2 percent from 2020, according to the latest market study by Gartner. In contrast, worldwide IT spending declined by 3.2 percent in 2020 as CIOs prioritized spending on technology and services that were deemed mission-critical during the initial stages of the pandemic.

Digital Transformation Market Development

Gartner says the speed of digital transformation in 2020 to satisfy remote working, remote education, and new social norms presented lockdowns and social distancing measures as double-edged swords.

"CIOs have a balancing act to perform in 2021 -- saving cash and expanding IT," said John-David Lovelock, vice president at Gartner. "With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board-level attention going into 2021."

All IT spending segments are forecast to return to growth in 2021. Enterprise software is expected to have the strongest rebound (8.8 percent) as remote work environments are expanded and improved. The devices segment will see the second-highest growth in 2021 (8 percent) and is projected to reach $705.4 billion in IT spending.

"There is a combination of factors pushing the devices market higher," said Mr. Lovelock.

As countries continue remote education through this year, there will be a demand for media tablets and laptop computers for students. Likewise, enterprises are standardizing on remote work methodologies as quarantine measures keep their knowledge worker employees at home.

By 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints.

Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021 -- that's an increase of 4.9 percent of spending levels from 2020.

"Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security, and customer experience at the forefront. Optimization initiatives, such as hyper-automation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks," said Mr. Lovelock.

According to the Gartner assessment, despite the availability of COVID-19 vaccines, the virus will continue to require government health interventions throughout 2021. Non-COVID-19 geopolitical factors such as Brexit and the U.S.-China tension will also inhibit recovery for some regions.

Outlook for Digital Transformation Applications Growth

Overall, returning global recovery back to 2019 spending rates will not occur until 2022, although many countries may recover earlier. People-gathering industries -- such as restaurants, travel, and entertainment -- will hover at the bottom long-term.

"COVID-19 has shifted many industries’ techquilibrium," said Mr. Lovelock. "Greater levels of digitalization of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed."

I believe that more CIOs and CTOs will reassess their Digital Workspace strategies in 2021. The Hybrid Workforce phenomenon creates increasing demand to support more remote working employees' need for secure internet access -- regardless of their location. Besides, many employees already require secure access to a combination of enterprise applications that reside in corporate data centers and SaaS apps within the cloud.

Popular posts from this blog

The $4 Billion Opportunity for Satellite IoT

In an era where wireless connectivity is pervasive, Satellite Internet of Things (IoT) can change industries, offering leaders unprecedented opportunities to drive efficiency and innovation. As industries across the globe seek to enhance operational efficiency and sustainability, satellite IoT emerges as a pivotal enabler. According to a worldwide study by ABI Research, the Satellite IoT market is forecast to reach $4 billion by 2030, with over 26 million connections anticipated. "Prominent satellite IoT providers such as Inmarsat, ORBCOMM, Globalstar, Myriota, and hiSky have been actively working together with their partners to expand their service offerings and enhance connectivity solutions," said Jake Saunders, vice president at ABI Research . Satellite IoT Market Development The satellite IoT market's expansion is largely fueled by its application across key verticals, including agriculture, energy and utilities, fisheries and aquaculture, and environmental monitorin