Gartner Says Global IT Spending to Reach $3.9 Trillion in 2020

Businesses Revisit IT Spending as Economic and Political Uncertainty Lessens

STAMFORD, Conn., January 15, 2020 — Worldwide IT spending is projected to total $3.9 trillion in 2020, an increase of 3.4% from 2019, according to the latest forecast by Gartner, Inc. Global IT spending is expected to cross into $4 trillion territory next year.

“Although political uncertainties pushed the global economy closer to recession, it did not occur in 2019 and is still not the most likely scenario for 2020 and beyond,” said John-David Lovelock, distinguished research vice president at Gartner. “With the waning of global uncertainties, businesses are redoubling investments in IT as they anticipate revenue growth, but their spending patterns are continually shifting.”

Software will be the fastest-growing major market this year, reaching double-digit growth at 10.5% (see Table 1). “Almost all of the market segments with enterprise software are being driven by the adoption of software as a service (SaaS),” said Mr 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.”

Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)

2019

Spending

2019

Growth (%)

2020

Spending

2020

Growth (%)

2021 Spending2021 Growth (%)
Data Centre Systems205-2.72081.92121.5
Enterprise Software4568.550310.555610.5
Devices682-4.36880.8685-0.3
IT Services1,0303.61,0815.01,1405.5
Communications Services1,364-1.11,3841.51,4132.1
Overall IT3,7370.53,8653.44,0073.7

Source: Gartner (January 2020)

Growth in enterprise IT spending for cloud-based offerings will be faster than growth in traditional (noncloud) 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.

“Last quarter, we introduced the ‘and’ dilemma where companies are challenged with cutting costs and investing for growth simultaneously. Maturing cloud environments is an example of how this dilemma is alleviated: Organisations can expect a greater return on their cloud investments through cost savings, improved agility and innovation, and better security. This spending trend isn’t going away anytime soon.”

The headwind coming from a strong US dollar has become a deterrent to worldwide IT spending on devices and data centre equipment in effected 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,” said Mr Lovelock.

IT spending in Western Europe during 2020 and 2021 will mirror that of the US after the recession which ended in 2009. “2019 was a challenging year for IT spending in Western Europe and full of business uncertainty, similar to the 2009 recession in the US,” said Mr Lovelock. “In 2020, business confidence will not fully return, and neither will IT budget growth. However, there will be an expectation for IT to drive business.” As a result, IT departments will defer expensive projects, strive to make cost savings where they can, and rely more on “as a service” offerings. The software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS) sectors will each exhibit IT spending growth above 10% in 2020 and 2021, whereas spending in the PC, server and storage sectors will decline.

Despite 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,” said Mr Lovelock.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 4Q19 Update.” This quarterly IT spending forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and organization size.

To learn more about how we help decision makers fuel the future of business, visit www.gartner.com.

——————————————————–

Have you checked out the new WhichVoIP.co.za website as yet? Benchmark your services against your peers, have a look at what your competitors are doing, get listed in the best Telecoms provider directory in South Africa, and advertise on the site to attract customers to your page where you can view page hits, respond to reviews, load adverts, and more. Visit WhichVoIP.co.za or jump to a leading comparison section:

Enjoy the site!

——————————————————–

About Telecoms-Channel

Telecoms-Channel.co.za is your one-stop source for the latest news and insights from the telecoms industry in South Africa, where you get comprehensive coverage of the industry and keep up with the ever-evolving market landscape.

Whether you need to understand market trends, identify new opportunities, or stay informed of the latest developments, we have you covered.

In addition to bringing the best news together, we have access to an extensive supplier network that makes it easy for any telecoms company looking to tap into new markets or enter the telecoms industry. Take advantage of our expertise and contact us today to find your next partner!

Other posts you might be interested in

Ericsson LG
Industry News

Ericsson-LG’s Key Trends Shaping the Future of Enterprise Communication

Ericsson-LG is at the forefront of transforming the business communications landscape. By harnessing the power of artificial intelligence, cloud technology, and robust cybersecurity, the company is empowering businesses to enhance productivity, streamline operations, and improve customer experiences.

Cloud PBX Solutions

Request Once, Get Multiple Quotes - Save Thousands!