CIO Zone

Upswing in worldwide IT spend in 2020

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Global IT spending will total $3.9 trillion in 2020, an increase of 3.4% from the previous year.

This is the latest finding from market analyst firm Gartner, projecting worldwide IT spending will cross into $4 trillion territory in 2021.

John-David Lovelock, distinguished research vice-president at Gartner, says even though political uncertainties pushed the global economy closer to recession, it did not occur in 2019 and is still unlikely for 2020 and beyond.

“With the waning of global uncertainties, businesses are redoubling investments in IT as they anticipate revenue growth, but their spending patterns are continually shifting.”

Gartner’s research forecasts that enterprise software will record the fastest growth in 2020, reaching double-digit growth at 10.5%. “Almost all of the market segments with enterprise software are being driven by the adoption of software-as-a-service (SaaS),” explains Lovelock.

“We even expect spending on forms of software that are not cloud to continue to grow, albeit at a slower rate. SaaS is gaining more of the new spending, although licensed-based software will still be purchased and its use expanded through 2023.”

According to Gartner, growth in enterprise IT spending for cloud-based offerings will be faster than growth in traditional (non-cloud) IT offerings through 2022. Organisations with a high percentage of IT spending dedicated to cloud adoption is indicative of where the next-generation, disruptive business models will emerge.

The firm goes on to say the headwind coming from a strong US dollar has become a deterrent to worldwide IT spending on devices and data centre equipment in affected countries.

“For example, mobile phone spending in Japan will decline this year due to local average selling prices going up as a result of the US dollar increasing. The UK’s spending on PCs, printers, servers and even external storage systems is expected to decline by 3%, too,” adds Lovelock.

The report notes that despite the last quarter showing the sharpest decline within the device market among all segments, worldwide IT spending will return to overall growth in 2020 due to the adoption of new, less-expensive phone options from emerging countries.

“The almost $10 billion increase in device spending in Greater China and Emerging Asia/Pacific is more than enough to offset the expected declines in Western Europe and Latin America,” concludes Lovelock.

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