UPDATED 20:06 EDT / JANUARY 15 2020

POLICY

Gartner forecasts worldwide IT spending will hit $3.9T this year

Gartner Inc. says global spending on information technology will rise to $3.9 trillion in 2020, up just a hair from $3.8 trillion last year, driven chiefly by enterprises buying more cloud software and the end of support for Microsoft Corp.’s Windows 7 operating system.

But some parts of the massive budget are growing much faster. The research firm’s latest forecast, released today, shows that software-as-a-service will be the main driver for IT spending in 2020, growing by 10.5% as enterprises increase their use of cloud services.

But in fact, every IT segment will see growth in 2020, with spending on IT services rising 5%, data center systems growing 1.9%, communications services up 1.5% and devices up 0.8%.

Not surprisingly, Gartner said it expects enterprise investment in cloud-based software and services to grow faster than that of noncloud offerings. “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 research firm added.

Device sales actually declined in the fourth quarter of 2019, but Gartner says the market will return to growth this year with an expected $10 billion increase in spending driven by cheap handset sales in emerging markets.

Spending would be even higher if not for the strong dollar, Gartner said. The rising strength of the U.S. currency will likely mean higher prices for premium devices and data center equipment in most markets, which should curtail some spending.

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“Although political uncertainties pushed the global economy closer to a recession, it did not occur in 2019 and is still not the most likely scenario for 2020 and beyond,” John-David Lovelock, research vice president at Gartner, said in a statement. “With the waning of global uncertainties, businesses are redoubling investments in IT as they anticipate revenue growth, but their spending patterns are continually shifting.”

Gartner added that it expects global IT spending to top $4 trillion in 2021.

Earlier this week, Gartner and International Data Corp. published numbers for the all-important personal computer market, saying they expect sales to grow in 2020 following years of struggle. Gartner said total worldwide PC shipments in the fourth quarter of 2019 hit 70.6 million units, while IDC put the number at 71.8 million units, representing growth of 2.3% and 4.8% respectively.

Image: mohamed_hassan/Pixabay

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