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Gartner: IT spending to focus on fast time to value

There are no surprises in Gartner’s latest forecast. IT budgets are being spent on supporting remote workers, but CIOs have new metrics

The latest IT spending forecast from analyst Gartner has reported that IT departments in Europe, Middle East and Africa spent less in 2020, but there is going to be a return to IT investment in 2021.

According to Gartner, the region is expected to decline 6.5% in 2020, but for 2021, Gartner has forecast an increase in spending of 2.8%. Investments in delivering technologies to support remote workers will fuel this growth.

The analyst firm forecast that a 7.7% decline in datacentre spending for 2020 will be reversed and there will be 4.1% growth in 2021. Enterprise software spending, which is forecast to decline by 4.1% this year, is set to grow by 6.1% in 2021.The 15.1% decline in device spending in 2020 will turn into 1.7% growth during 2021.

“The pandemic has forced employers to adopt remote working, turning it into a strategic workforce policy,” said Ranjit Atwal, research vice-president at Gartner. “Mobile PCs are a necessity for remote work and EMEA organisations will refocus some spending on mobile PCs.”

The speed at which remote working is occurring varies considerably around the world depending on IT adoption, culture, and mix of industries. Gartner predicted that the US will lead in terms of remote workers in 2021, accounting for 52% of the US workforce. Across Europe, UK remote workers will represent 48% of its workforce in 2021, while remote workers in Germany and France will account for 38% and 34%, respectively.

The analyst firm forecast that EMEA organisations will increase their total spending on collaboration and content platforms by 17%. It said that the next largest area of IT spending will be in security software (11%) and cloud conferencing unified communications (4%).

John-David Lovelock, distinguished research vice-president at Gartner, said: “Before the pandemic, most organisations moved their digital strategies forward at a steady pace. The way forward in 2021 is for organisations is to increase, rather than decrease, the speed of their digital business initiatives and fund those initiatives by diverting funds from other areas of IT.”

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While some areas of IT are set to see more investment, Lovelock said some, like email and content services, are set to decline. He said that some systems are seen as good enough to last another year, which frees up IT budgets to invest in other areas.

According to Lovelock, CIOs will try to target IT investments in those areas that have the fastest cash return, which is a measure of how quickly the investment delivers value to the business.

Rather than planning budgets for a PC refresh, he said, CIOs have needed to react to lockdown measures, resulting in an increase in purchases on thin and light notebook PCs for people working from home. While these are generally more expensive than more basic laptops, they tend to fit in better with home working, where there is no dedicated workspace.

“Companies used to do a slow PC refresh, but this year the focus is on remote work,” he said.

The budget calculations are not based on a return on investment. Instead, CIOs are having to second guess how quickly such expenditure can deliver business value.

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