Global IT spending to grow 1.1% in 2019: Gartner

Currency headwinds fueled by the strengthening US$ drives downward revision in 2019 IT spending forecast

Worldwide IT spending is projected to total US$ 3.79 trillion in 2019, an increase of 1.1% from 2018, according to the latest forecast by Gartner, Inc.

"Currency headwinds fueled by the strengthening U.S. dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter," said John-David Lovelock, research vice president at Gartner. "Through the remainder of 2019, the U.S. dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars.

"In 2019, technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down," said John-David Lovelock. "Successful product managers in 2020 will have had a long-term view to the changes made in 2019."

The data center systems segment will experience the largest decline in 2019 with a decrease of 2.8% (see Table 1). This is mainly due to expected lower average selling prices (ASPs) in the server market driven by adjustments in the pattern of expected component costs.

The shift of enterprise IT spending from traditional (noncloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market. In 2019, the market is forecast to reach US$ 427 billion, up 7.1% from US$ 399 billion in 2018. The largest cloud shift has so far occurred in application software. However, Gartner expects increased growth for the infrastructure software segment in the near-term, particularly in integration platform as a service (iPaaS) and application platform as a service (aPaaS).

Table 1. Worldwide IT Spending Forecast (US$ billion) 2018 2018 2019 2019 2020 2020Spending Growth (%) Spending Growth (%) Spending Growth (%)Data Center Systems 210 15.5 204 -2.8 207 1.7Enterprise Software 399 9.3 427 7.1 462 8.2Devices 667 0.3 655 -1.9 677 3.5IT Services 982 5.5 1016 3.5 1065 4.8Communications Services 1489 2.1 1487 -0.1 1513 1.7Overall IT 3747 4.0 3790 1.1 3925 3.6Source: Gartner (April 2019)

"The choices CIOs make about technology investments are essential to the success of digital business. Disruptive emerging technologies, such as artificial intelligence (AI), will reshape business models as well as the economics of public- and private-sector enterprises. AI is having a major effect on IT spending, although its role is often misunderstood," said John-David Lovelock. "AI is not a product, it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry. Gartner's AI business value forecast predicts that organizations will receive US$ 1.9 trillion worth of benefit from the use of AI this year alone."

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