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IT spending rally could hit $3.9T in 2021

IT spending rally could hit $3.9T in 2021

Gartner claims businesses need to advance digital transformation plans five years to survive in a post-pandemic world

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Gartner projects worldwide IT spending will total US$3.9 trillion in 2021, an increase of 6.2 per cent over 2020 when investment declined a little over three per cent.

All IT spending segments - from data centre systems to communications services - are forecast to return to growth in 2021, according to Gartner. Enterprise software is expected to have the strongest rebound, 8.8 per cent, as remote work environments are expanded and improved. The devices segment will see the second highest growth in, eight per cent, and is projected to reach $705.4 billion.

“CIOs have a balancing act to perform in 2021 - saving cash and expanding IT,” said John-David Lovelock, distinguished research vice president at Gartner in a statement. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels.”

Enterprises are industrialising remote work for employees as quarantine measures keep employees at home, and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020, Lovelock stated. “As countries continue remote education through this year, there will be a demand for tablets and laptops for students,” he stated.

Digital business transformation will be a huge spending driver through 2024, Lovelock stated.

“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront. Optimisation initiatives, such as hyper-automation, will continue, and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks,” said Lovelock.

The concept of hyper-automation involves combining machine learning (ML), packaged-software and automation tools to deliver work, Gartner said. The pandemic has heightened demand with the sudden requirement for everything to be “digital-first.” The backlog of requests from business stakeholders has prompted more than 70 per cent of commercial organisations to undertake dozens of hyper-automation initiatives as a result, Gartner added.

Lovelock stated that companies will be forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touch-points. Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9 per cent from 2020.

The forecast represents a recovery from 2020 predictions. In May, Gartner said that IT spending across the globe was projected to total $3.4 trillion in 2020, a decline of eight per cent from 2019 due to the impact of COVID-19, and the pandemic will continue to affect IT spending.

“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront," Lovelock stated. "Optimisation initiatives, such as hyper-automation, will continue, and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks.

“Greater levels of digitalisation of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed."


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