Enterprise, cloud software to lead global IT spending in 2019: Gartner

Enterprise, cloud software to lead global IT spending in 2019: Gartner
Photo Credit: Photo Credit: Pixabay
18 Oct, 2018

Worldwide expenditure on information technology is projected to grow 3.2% in 2019, led by enterprise and cloud software, market research firm Gartner said.

Gartner said in its latest forecasts on Thursday that global IT spending is likely to reach $3.8 trillion in 2019 from an estimated $3.7 trillion in 2018. Spending on enterprise software is projected to record the highest growth, 8.3%, in 2019.

“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,” John-David Lovelock, research vice president at Gartner, said in a statement.

“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.”

Lovelock said 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.

He added that cloud software is expected to grow more than 22% in 2019 compared with 6% growth for all other forms of software. 

“While core applications such as ERP (enterprise resource planning), CRM and supply chain continue to get the lion's share of dollars, security and privacy are of particular interest right now. Eighty-eight percent of recently surveyed global CIOs have deployed or plan to deploy cybersecurity technology in the next 12 months,” Lovelock said.

The research firm said growth in data centre systems will slow next year, to 1.6% from 6.4% in 2018. The segment was buoyed last year by a strong server market that saw spending growth of more than 10%. However, the market for servers will drop 1-3% every year for the next five years. This will impact overall data centre systems spending.

Gartner also said that services will be a key driver for IT spending in 2019 as this segment is forecast to reach $1 trillion in 2019, an increase of 4.7% 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,” Gartner said.

In a recent report, the market research firm had said that nearly 46% of organisations had indicated that IT services and supplier consolidation was in their top three most-effective cost-optimization approaches.

In other projections, Gartner said worldwide spending on personal computers, tablets and mobile is forecast to grow 2.4% in 2019, reaching $706 billion from $689 billion in 2018. 

Gartner noted that demand for PCs in the corporate sector has been strong, driven by Windows 10 PC hardware upgrades – a trend that is likely to continue till 2020.

However, it noted that the PC market may see some impact from the Intel CPU shortage. While this shortage will have some short-term impacts, Gartner said it does not expect any lasting impact on overall PC demand.