While IT spending worldwide in 2021 is projected by Gartner to be higher than in 2020 ($3.8 trillion compared to $3.6 trillion), it is set to be down from total spending throughout 2019.
All IT spending segments are predicted to decline in 2020, but enterprise software is expected to have the strongest rebound in 2021, due to acceleration of digitalisation efforts by businesses supporting a remote workforce, delivering virtual services, and leveraging hyperautomation to ensure pandemic-driven demands are met.
Spending on data centre systems will see the second highest amount of growth in 2021 according to Gartner, as hyperscalers accelerate global data centre build-out, while regular organisations resume data centre expansion plans and allow staff to be physically back onsite.
Enterprise cloud spending, which falls into multiple segments, will not be reflected in vendors’ revenue until 2021, despite cloud activity increasing in 2020 as organisations looked to facilitate remote operations.
“In the 25 years that Gartner has been forecasting IT spending, never has there been a market with this much volatility,” said John-David Lovelock, distinguished research vice president at Gartner. “While there have been unique stressors imposed on all industries as the ongoing pandemic unfolds, the organisations that were already more digital going into the crisis are doing better and will continue to thrive going into 2021.
“The spending slowdown that took place from roughly April through August of this year, coupled with cloud service providers’ ‘try before you buy’ programmes, is shifting cloud revenue out of 2020. Cloud had a proof point this year — it worked throughout the pandemic, it scaled up and it scaled down. This proof point will allow for accelerated penetration of cloud through 2022.
Challenging cloud migration myths amidst Covid-19
“With revenue uncertainty promoting cash from being King to being Emperor, CIOs are now prioritising IT projects where the time to value is lowest.
“Companies have more IT to do and less money to do it, so they are pulling money out of the areas they can afford, such as mobile phone and printer refreshes, which is why there will be less growth in the devices and communications services segments. Instead, CIOs are spending more in areas that will accelerate their digital business, such as IaaS or customer relationship management software.”
Moving forward, digital transformation will not be subject to the same ROI justification it was pre-pandemic as the mandate for IT becomes business survival, rather than growth.
