The total IT spending around the globe is projected to grow by 3.7% in 2020 when compared to 2019. Before this, 2019 predictions saw the lowest growth of only 0.4% from 2018, according to Gartner.
Gartner analysts credit enterprise software spending as the main driver of this growth.
“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, research vice president at Gartner.
The report highlights today’s complex geopolitical environment that has driven regulatory compliance to the top of organizations’ priority list. With this, the overall spending on security has increased 10.5% in 2019, with cloud security expected to grow 41.2% in the next five years.
There has been a rapid increase in cloud-computing adoption as more and more organizations move towards the cloud to pursue digital transformation. Gartner believes that the growth in the general IT spending rate is increasing due to high cloud spending.
The strongest decline among all segments in 2019 will occur in the device market, down 5.3% from $713 billion in 2018. However, it is expected to bounce back in 2020, with a modest growth rate of 1.2%.
“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,” said Mr. Lovelock.
Image: Gartner
Gartner says that the US is spending the highest on cloud services, accounting for more than half of the global cloud spending, followed by the UK spending 8% on the public cloud services. China has been growing its cloud spending year over year, experiencing the highest growth, but it will not reach the U.S. levels by 2023.
The organizations that gain maturity in cloud adoption and invest in IT will be recognized as the digital leaders in the future.
“Most companies are caught trying to either cut costs or invest for growth, but the top-performing enterprises are doing both. A core challenge facing the industry is how organizations can operate as both a traditional company and a technology company at the same time,” said Mr. Lovelock.
“These ‘and’ dilemmas will drive future IT spending trends,” he added.
READ NEXT: Sixty percent of CIOs to adopt blockchain technology in next three years: Gartner
