Gartner reveals 3.4% growth and drivers for IT spending in 2020

Worldwide IT spending is forecast to increase 3.4 percent to $3.9 trillion in 2020, according to the latest report from Gartner.
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Global IT spending is expected to touch $4 trillion in 2021.

Gartner’s October 2019 report said worldwide IT spending would reach $3.7 trillion in 2019, an increase of 0.4 percent from 2018. Gartner also said IT spending will rebound in 2020 a rise of 3.7 percent, primarily due to enterprise software spending.

Enterprises will be spending $208 billion (+1.9 percent) in 2020 and $212 billion (+1.5 percent) in 2021 on data center systems as compared with $205 billion (–2.7 percent) in 2018.

Enterprises will be spending $503 billion (+10.5 percent) in 2020 and $556 billion (+10.5 percent) in 2021 on enterprise software as compared with $456 billion (+8.5 percent) in 2018.

Enterprises will be spending $688 billion (+0.8 percent) in 2020 and $685 billion (-0.3 percent) in 2021 on devices as compared with $682 billion (–4.3 percent) in 2018.

Enterprises will be spending $1,081 billion (+5 percent) in 2020 and $1140 billion (+5.5 percent) in 2021 on IT services as compared with $1,082 billion (+3.6 percent) in 2018, the Gartner report said.

Enterprises will be spending $1,384 billion (+1.5 percent) in 2020 and $1,413 billion (+2.1 percent) in 2021 on communication services as compared with $1,364 billion (–1.1 percent) in 2018.

“Although political uncertainties pushed the global economy closer to recession, it did not occur in 2019 and is still not the most likely scenario for 2020 and beyond,” said John-David Lovelock, distinguished research vice president at Gartner.

Software will be the fastest-growing major market this year, reaching double-digit growth at 10.5 percent. Almost all of the market segments with enterprise software are being driven by the adoption of software as a service (SaaS).

Growth in enterprise IT spending for cloud-based offerings will be faster than growth in traditional (non-cloud) IT offerings through 2022. Organizations with a high percentage of IT spending dedicated to cloud adoption is indicative of where the next-generation, disruptive business models will emerge.

The headwind coming from a strong U.S. dollar has become a deterrent to IT spending on devices and data center equipment in effected countries.

Mobile phone spending in Japan will decline this year due to local average selling prices going up as a result of the U.S. dollar increasing.

The U.K.’s spending on PCs, printers, servers and even external storage systems is expected to decline by 3 percent.

The $10 billion increase in device spending in Greater China and Emerging Asia Pacific is more than enough to offset the expected declines in Western Europe and Latin America, Gartner said.

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