Global IT spending to remain flat in 2019: Gartner

Cloud continues to influence ever-greater portions of enterprise IT decisions

Spending in on-premise data centres will only continue to be dropped as cloud gains momentum, Lovelock said.
Spending in on-premise data centres will only continue to be dropped as cloud gains momentum, Lovelock said.

Worldwide IT spending will remain flat in 2019 to total $3.74 trillion, an increase of only 0.6% from 2018, according to Gartner. This is almost half the forecast of the previous quarter forecast of 1.1% growth.

The enterprise software market will experience the strongest growth in 2019, reaching $457 billion, up 9% from $419 billion in 2018 (see table). CIOs are continuing to rebalance their technology portfolios, shifting investments from on-premises to off-premises capabilities.

As cloud becomes increasingly mainstream over the next few years, it will influence ever-greater portions of enterprise IT decisions, in particular system infrastructure, the research firm says. Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing. Over this forecast period it will expand to cover additional application software segments, including office suites, content services and collaboration services.

“Spending in old technology segments, like data centre, will only continue to be dropped,” said John-David Lovelock, research vice president at Gartner.

2018
Spending
2018
Growth (%)
2019
Spending
2019
Growth (%)
2020 Spending 2020 Growth (%)
Data Center Systems 210 1507 203 -3.5 208 2.8
Enterprise Software 419 13.5 457 9.0 507 10.9
Devices 712 5.9 682 -4.3 688 0.8
IT Services 993 6.7 1,031 3.8 1,088 5.5
Communications Services 1,380 -0.1 1,3365 -1.0 1,386 1.5
Overall IT 3,716 5.1 3,740 0.6 3,878 3.7

Globally, consumer spending as a percentage of total spend is dropping every year in every region due to saturation and commoditization, especially with PC, laptops and tablet devices. Cloud applications allow these devices to have an extended life, with less powerful equipment needed to run new software. This is why the devices market will experience the strongest decline in 2019, down 4.3% to $682 billion in 2019.

“There are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades,” said Lovelock. “Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop.”

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