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John-David Lovelock

Global IT spending to grow 3.2pc in 2019: Gartner

DUBAI, November 12, 2018

Worldwide IT spending is projected to total $3.8 trillion in 2019, an increase of 3.2 per cent from expected spending of $3.7 trillion in 2018, according to the latest forecast by research and advisory firm Gartner.

“While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast,” said John-David Lovelock, research vice president at Gartner.

“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.”

Enterprise software spending is forecast to experience the highest growth with an 8.3 per cent increasein 2019 (see Table 1).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 per cent this year compared with 6 per cent 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 per cent of recently surveyed global CIOs have deployed or plan to deploy cybersecurity technology in the next 12 months.

Gartner analysts are discussing the emerging trends that are driving digital transformation and IT spending this week during Gartner Symposium/ITxpo here through Thursday.

In 2018, data center systems are expected to grow 6 per cent, buoyed by a strong server market that saw spending growth of more than 10 per cent over the last year, and in 2018 will come in at 5.7 per cent growth. However, by 2019 servers will shift back to a declining market and drop 1 per cent to 3 per cent every year for the next five years. This, in turn, will impact overall data center systems spending as growth slows to 1.6 per cent 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 per cent from 2018. An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organizations to optimize enterprise external spend for business services such as consulting. In a recent Gartner study, 46 per cent of organizations indicated that IT services and supplier consolidation was in their top three most-effective cost-optimization approaches.

Worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow 2.4 per cent 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 prioritize 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. – TradeArabia News Service




Tags: Gartner | IT Spending |

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