Global IT spending is projected to reach $3.7 trillion in 2018, an increase of 4.5% from 2017, according to a report by market research firm Gartner.
“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations and a possible global recession,” said John-David Lovelock, research vice president at Gartner.
“Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift. Projects in digital business, blockchain, Internet of Things (IoT), and progression from Big Data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth,” Lovelock said.
Gartner classifies IT spending into five categories — enterprise software, data centre systems, devices, IT services and communication services. According to the market research firm, enterprise software continues to exhibit strong growth, with worldwide software spending projected to grow 9.5% in 2018, and it will grow another 8.4% to $421 billion in 2019.
Organisations are expected to increase spending on enterprise application software in 2018, with more shifting in the budget towards software as a service (SaaS), the report said. “The growing availability of SaaS-based solutions is encouraging new adoption and spending across many subcategories, such as financial management systems (FMS), human capital management (HCM) and analytic applications,” it said.
The devices segment is expected to grow 5.6% in 2018. The report showed that the devices segment experienced growth for the first time in two years with an increase of 5.7% in 2017. It shared that end-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward even as unit sales are forecast to be lower.
PC growth is expected to be flat in 2018 even as continued Windows 10 migration is expected to drive positive growth in business markets in China, Latin America and Eastern Europe, it said, adding that the impact of the iPhone 8 and iPhone X was minimal in 2017, as expected. However, iOS shipments are expected to grow 9.1% in 2018, the report shared.
“Looking at some of the key areas driving spending over the next few years, Gartner forecasts $2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity,” said Lovelock.
“Spending on AI for customer experience and revenue generation will likely benefit from AI being a force multiplier — the cost to implement will be exceeded by the positive network effects and resulting an increase in revenue,” said Lovelock.
Gartner’s IT spending forecast methodology relies on an analysis of sales by thousands of vendors across the entire range of IT products and services. It uses primary research techniques, complemented by secondary research sources, to build a database of market size data on which to base its forecast.