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

Global Digital Business and IT Consulting Outlook

Across the globe, CEOs and their leadership teams continue to seek information and guidance about planned Digital Transformation initiatives and the most effective enterprise organization change management practices. Worldwide IT and Business Services revenue will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023 -- that's a 5.7 percent year-over-year growth, according to the latest market study by International Data Corporation (IDC). The mid-term to long-term outlook for the market has also increased -- the five-year CAGR is forecast at 5.2 percent, compared to the previous 4.9 percent. Digital Sevices & Consulting Market Development IDC has raised the growth projection despite a weak economic outlook, because of vendor performances across 2022, growth indicators from adjacent markets, increased government funding, and inflation impacts. The actual 2022 market growth was 6.7 percent (in constant currency), which was 87 basis points higher than forecast last year, alth

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul