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Gartner: IT spending to hit $3.8T; enterprise software, IT services lead way

News Analysis
Oct 19, 20183 mins
Cloud ComputingEnterprise Applications

Gartner says IT services will be a key driver for IT spending in 2019, as the market is forecast to hit $1 trillion in 2019

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Enterprise software and IT services lead the way as overall IT spending will hit $3.8 trillion in 2019, according to Gartner analysts.

The numbers mean a shift from ownership to service that is sending ripples through every segment of the forecast, said Gartner research vice president John-David Lovelock.

“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,” Lovelock said. “This sets enterprises up to deal with the sustained and rapid change that underscores digital business.”

Some spending data from Gartner:

  • Worldwide IT spending is projected to total $3.8 trillion in 2019, up 3.2 percent from expected spending of $3.7 trillion in 2018.
  • Enterprise software spending is forecast to experience the highest growth with an 8.3 percent increase in 2019.
  • Communications services such as MPLS and other WAN services will hit $1.4 trillion in 2018.
  • IT services will be a key driver for IT spending in 2019 when the market is forecast to hit $1 trillion, an increase of 4.7 percent from 2018.
  • Software as a service (SaaS) is driving growth in almost all software segments, particularly customer relationship management (CRM). Cloud software will grow at more than 22 percent this year compared to 6 percent growth for all other forms of software. While core applications such as ERP, CRM and supply chain management continue to get the lion’s share of dollars, security and privacy are of particular interest right now, Gartner said.
  • Data-center spending is expected to grow 6 percent in 2018, buoyed by a strong server market that saw spending growth of more than 10 percent over the last year, and in 2018 will come in at 5.7 percent growth.
  • Worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow 2.4 percent 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.
  • The PC market may see some impact from the Intel CPU shortage. While this shortage will caise some short-term delays, Gartner does not expect any lasting effect on overall PC demand. Gartner said 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.

Gartner analysts spent the week defining how IT and business processes, including spending are changing in the digital world at its Symposium/IT Expo in Orlando. 

Gartner released its annual global survey of CIOs which reveled among other things that the “transformation toward digital business is supported by steady IT budget growth.

“CIOs should use their financial resources to make 2019 a transformative year for their businesses. Stay active in the transformation discussions, and invest time, money and human resources to remove any barriers to change,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner. “Enterprises that fall behind in digital business now will have to deal with a serious competitive disadvantage in the future.”

Gartner said it asked CIOs and IT leaders which technologies they expect to be most disruptive. Artificial intelligence (AI) was by far the most mentioned technology and takes the spot as the top game-changer technology away from data and analytics, which is now in second place.