At its annual IT Symposium/Xpo in October, Gartner Inc. projected worldwide IT spending to total $3.7 billion this year (2019), which is an increase of just 0.4% over 2018. Gartner added, however, that it expects global IT spending to rebound in 2020, with forecast growth of 3.7%. It cited enterprise software spending as a primary growth driver.
“The slowdown in IT spending in 2019 is not expected to stretch as far into 2020 despite concerns over a recession and companies cutting back on discretionary IT spending,” said John-David Lovelock, Gartner’s research vice president.
The company added that today’s complex geopolitical environment has pushed regulatory compliance to the top of organizations’ priority list. Overall spending on security increased 10.5% in 2019, with cloud security projected to grow 41.2% over the next five years. “This is not just about keeping the bad guys out,” Lovelock said. “It is also about the expanding need to be compliant with tariffs and trade policy, intellectual property rights, and even with the multiple and sometimes overlapping privacy laws.”
In the U.S., IT spending will grow 3.5% in 2019, Gartner added, emphasizing that growth is “despite the ongoing tariff war.” In China, by contrast, IT spending is expected to grow 0.1% in 2019. “Tariffs do not have a direct effect on IT spending yet,” Lovelock added. “Should tariffs extend to devices like PCs and mobile phones, we will likely see manufacturers switch supply routes to minimize costs and have their technology made outside of Chinas.”
In 2019, the device market will hurt the most, according to Gartner—down 5.3% from its $713-billion number in 2018. That market will grow modestly, at 1.2%, in 2020. Lovelock observed, “Similar to how consumers have reached a threshold for upgrading to new technology and applications, technology general managers and product managers should invest only in the next generation of products that will push them closer to becoming a true technology company.”
The rest of the world is catching up on cloud spending, which drives much IT-spending growth, Gartner added. “The U.S. is leading cloud adoption and accounts for over half of global spending on cloud,” the company said. “In some cases, countries that Gartner tracks lag one to seven years in cloud adoption rates.”
Lovelock added, “For perspective, the country directly behind the U.S. on cloud spending is the United Kingdom, which only spends 8% on public cloud services. An interesting outlier is China, which has the highest growth of cloud spending out of all countries. While China is closing the spending gap, it still will not reach U.S. levels by 2023.”