Global IT Spending to Grow 0.6% in 2019

In BICSI Bytes, Newsby info@bicsi.com.au

Worldwide IT spending is projected to total US$3.74 trillion in 2019, an increase of 0.6% from 2018, according to Gartner’s latest forecast. This is slightly down from the previous quarter’s forecast of 1.1% growth.

Commenting on the revised forecast, research vice president at Gartner, John-David Lovelock said: “Despite uncertainty fuelled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019. While there is great variation in growth rates at country level, virtually all countries tracked by Gartner will see growth in 2019. Despite the ongoing tariff war, North America IT spending is forecast to grow 3.7% in 2019.

“Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur.”

Notably, 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. 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.

Globally, consumer spending as a percentage of total spend is dropping every year due to saturation and commoditisation, 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,” continued Lovelock. “Add in their extended lifetimes along with the introduction of smart-home technologies and IoT, consumer technology spending continues to drop.”