Global IT spending to grow strongly in 2019, Gartner says
Surge in software and services demand drive worldwide IT spending
Enterprises’ appetite for software and services is fuelling a surge in IT spending globally.
According to the latest forecast by Gartner, worldwide IT spending is projected to total $3.8 trillion in 2019, an increase of 3.2% from expected spending of $3.7 trillion in 2018.
John-David Lovelock, research vice president at Gartner, said the shift from ownership to service is sending ripples through every segment of the market, in spite of currency volatility and the potential for trade wars.
“What this signals, for example, is more enterprise use of cloud services — instead of buying their own servers, they are turning to the cloud. As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business,” Lovelock added.
Enterprise software spending is forecast to grow at 8.3% increase in 2019, the research firm said. Software as a service (SaaS) is driving growth in almost all software segments, particularly customer relationship management (CRM), due to increased focus on providing better customer experiences. Cloud software will grow at more than 22% this year compared with 6% growth for all other forms of software. While core applications such as ERP, CRM and supply chain continue to get the lion share of dollars, security and privacy are of particular interest right now. Eighty-eight percent of recently surveyed global CIOs have deployed or plan to deploy cybersecurity technology in the next 12 months.
In 2018, data centre systems are expected to grow 6%, buoyed by a strong server market that saw spending growth of more than 10% over the last year, and in 2018 will come in at 5.7% growth. However, by 2019 servers will shift back to a declining market and drop 1% to 3% every year for the next five years. This, in turn, will impact overall data centre systems spending as growth slows to 1.6% in 2019.
IT services will be a key driver for IT spending in 2019 as the market is forecast to reach $1 trillion in 2019, an increase of 4.7% from 2018. An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organisations to optimise enterprise external spend for business services such as consulting. In a recent Gartner study, 46% of organisations indicated that IT services and supplier consolidation was in their top three most-effective cost-optimisation approaches.
Worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow 2.4% in 2019, reaching $706 billion, up from $689 billion in 2018. Demand for PCs in the corporate sector has been strong, driven by Windows 10 PC hardware upgrades that should continue until 2020. However, the PC market may see some impact from the Intel CPU shortage. While this shortage will have some short-term impacts, Gartner does not expect any lasting impact on overall PC demand. The current expectation is that the shortage will continue into 2019, but Intel will prioritise the high-end CPU as well as the CPUs for business PCs. In the meantime, AMD will pick up the part of the market where Intel cannot supply CPUs.
“PCs, laptops and tablets have reached a new equilibrium state. These markets currently have stable demand from consumers and enterprises. Vendors have only subtle technology differentiation, which is pushing them to offer PC as a Service (PCaaS) in order to lock-in clients into multiyear recurring revenue streams and offer new bundles service options.” Said Lovelock.