Gartner cuts projection for global IT spending to $3.74tn

Gartner cuts projection for global IT spending to $3.74tn
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10 Jul, 2019

Global information technology (IT) spending is projected to increase only by 0.6% to $3.74 trillion in 2019, according to a forecast by research and advisory firm Gartner. The forecast is a decline from the previous quarter’s estimate, which pegged worldwide IT spending to increase by 1.1%.

“Despite uncertainty fueled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019,”John-David Lovelock, Research Vice President at Gartner, said, 

Commenting on the likelihood of an economic downturn, Lovelock said, “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 general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur.”

As per Gartner, the enterprise software market will experience the strongest growth in 2019, reaching $457 billion, up 9% from the previous year. Growth of the enterprise software market is expected to hit the 10% mark in 2020 while growth in the devices market is expected to remain sluggish at 0.8%.

Explaining the decline in the growth and spending in devices, Lovelock said, “There are hardly any new buyers in the devices market, meaning that the market is now being driven by replacements and upgrades. Add in their extended lifetimes along with the introduction of smart home technologies and internet of things, and consumer technology spending only continues to drop.”

Prior to 2018, cloud opportunities predominated in business process outsourcing and application software. As cloud computing continues to gain a wider foothold in the market, it is expected to have a spillover effect on enterprise IT decisions, particularly system infrastructure. Gartner’s forecast states that it expects cloud to cover office suites, content services and collaboration services. 

Gartner’s forecast methodology is heavily reliant on analysis of sales by vendors across the gamut of IT products and services, carried out through primary research techniques, complemented by secondary research sources, the company said in a statement. 

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