Global IT spending to reach $3.8tn in 2019

Source: pixabay.com

“Despite uncertainty fuelled by recession rumours, Brexit, and trade wars and tariffs, the likely scenario for IT spending in 2019 is growth,” said John-David Lovelock, research vice president at Gartner.

“However, there are a lot of dynamic changes happening in regards to which segments will be driving growth in the future. Spending is moving from saturated segments such as mobile phones, PCs and on-premises data centre infrastructure to cloud services and Internet of Things (IoT) devices. IoT devices, in particular, are starting to pick up the slack from devices. Where the devices segment is saturated, IoT is not.

“IT is no longer just a platform that enables organisations to run their business on. It is becoming the engine that moves the business,” added Lovelock. “As digital business and digital business ecosystems move forward, IT will be the thing that binds the business together.”

With the shift to cloud, a key driver of IT spending, enterprise software will continue to exhibit strong growth, with worldwide software spending projected to grow 8.5% in 2019. It will grow another 8.2% in 2020 to total $466bn (see below). Organisations are expected to increase spending on enterprise application software in 2019, with more of the budget shifting to software as a service (SaaS).

Worldwide IT Spending Forecast (Billions of US Dollars)

Despite a slowdown in the mobile phone market, the devices segment is expected to grow 1.6% in 2019. The largest and most highly saturated smartphone markets, such as China, Unites States and Western Europe, are driven by replacement cycles. With Samsung facing challenges bringing well-differentiated premium smartphones to market and Apple’s high price-to-value benefits for its flagship smartphones, consumers kept their current phones and drove the mobile phone market down 1.2% in 2018.

“In addition to buying behaviour changes, we are also seeing skills of internal staff beginning to lag as organisations adopt new technologies, such as IoT devices, to drive digital business,” said Lovelock.

“Nearly half of the IT workforce is in urgent need of developing skills or competencies to support their digital business initiatives. Skill requirements to keep up, such as artificial intelligence (AI), machine learning, API and services platform design and data science, are changing faster than we’ve ever seen before.”

More detailed analysis on the outlook for the IT industry is available in the complimentary webinar “IT Spending Forecast, 4Q18 Update: What Will Make Headlines in 2019?”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, Q418 Update.” This quarterly IT Spending Forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

Lovelock will provide further analysis on the key drivers of the IT market at the Gartner Tech Growth & Innovation Conference taking place 12-13 June 2019 in London. The Conference is the premier event for technology providers to learn about the latest trends and tools, innovation predictions, positioning and thought leadership.