Despite the uncertainties fueled by Brexit threat and recession, the global IT spending is predicted to reach $3.76 trillion in 2019, as per Gartner. This is a 3.2% growth in IT spending from 2018.
Brexit (British exit) is UK’s decision to leave European Union (EU) which will significantly impact the IT industry. Whereas, other threats to IT like recession, trade wars and tariffs are also some of the factors that might affect the IT spending. However, the analyst firm mentioned that the likely scenario for IT spending in 2019 is growth.
“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 center 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,” said John-David Lovelock, research vice president at Gartner.
The IT spending will grow this year, but the growth has slowed down as compared to last year. In 2018, Gartner forecasted a 6.2% growth with global IT spending totaling $3.7 trillion. The analyst firm has been tracking the global IT spending since 2007, and 2018’s prediction marked the highest annual growth rate.
As more organizations migrate to cloud, enterprise software will be the key driver of IT spending in 2019. The organizations will use more of their IT budget on software-as-a-service (SaaS).
The global software spending is expected to grow 8.5% in 2019 and reach $431 billion. It will grow by another 8.2% in 2020 to total $466 billion.
“IT is no longer just a platform that enables organizations to run their business on. It is becoming the engine that moves the business,” added Mr. Lovelock. “As digital business and digital business ecosystems move forward, IT will be the thing that binds the business together.”
In last few months, the mobile phone market has slowed down. The consumers are choosing to keep their current mobile phones, which declined the growth of mobile phone market in 2018 by 1.2%. Despite this decline in growth, Gartner predicts that the devices segment is still expected to grow 1.6% in 2019.
“In addition to buying behavior changes, we are also seeing skills of internal staff beginning to lag as organizations adopt new technologies, such as IoT devices, to drive digital business,” said Mr. 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.”
Spending on data center systems will grow this year by 4.2%, down from 11.3% in 2018. Meanwhile, the spending on other market segments, like IT services and communication services are expected to grow by 4.7% and 1.3% respectively.
Mr. Lovelock will share further insights about IT market at Gartner Tech Growth & Innovation Conference on June 3-5 in San Diego, and June 12-13 in London.