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Gartner forecasts big shift in spending away from devices and datacentres

The IT market is basically flat, but there is demand for software and cloud-based services as CIOs shift away from datacentre infrastructure

IT spending has slowed down by 0.5% since the previous quarter, according to analyst Gartner.

The analyst firm’s latest forecast has projected that worldwide IT spending will total $3.74tn in 2019, an increase of 0.6% from 2018.

“Despite uncertainty fuelled by recession rumours, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019,” said John-David Lovelock, research vice-president at Gartner. “While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019.”

“Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning,” he said.

“Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur.”

As CIOs rebalance their technology portfolios, shifting investments from on-premise to off-premise capabilities, Gartner predicted that the enterprise software market will experience the strongest growth in 2019, reaching $457bn, up 9% from $419bn in 2018.

As cloud becomes increasingly mainstream over the next few years, Gartner predicted it would influence ever-greater portions of enterprise IT decisions, in particular system infrastructure. 

Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing (BPO). Gartner’s forecast has expanded the cloud application software segments to include office suites, content services and collaboration services.

“Spending in old technology segments, such as datacentre, will only continue to be dropped,” said Lovelock.

In its forecast for datacentres, Gartner predicted that spending on datacentre systems would decline by 3.5% during 2019, but spending will increase in 2020 by 2.8%.

Gartner also believes device sales will plummet, with a decline in growth of 4.3%. Lovelock added: “There are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades.”

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