Worldwide spending on information technology (IT) is projected to reach $3.79-trillion this year, a 1.1% increase from 2018, according to a forecast released by IT market research and advisory firm Gartner this week.
Spending on data centre systems and devices will decrease by 2.8% and 1.9%, respectively, but spending on enterprise software and IT services will increase by 7.1% and 3.5%, respectively, said Gartner research VP John-David Lovelock.
The data centre systems segment will experience the largest decline this year, mainly as a result of expected lower average selling prices 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 $427-billion, up 7.1% from $399-billion in 2018.
The largest cloud shift has so far occurred in application software. 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).
Currency headwinds fuelled by the strengthening dollar have prompted Gartner to revise its 2019 IT spending forecast down from the previous quarter, he said.
Through the remainder of this year, the dollar is expected to trend stronger while enduring volatility as a result of uncertain economic and political environments and looming trade wars.
“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 Lovelock.
“AI is not a product, it is 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 organisations will receive $1.9-trillion worth of benefit from the use of AI this year alone.
“In 2019, technology product managers will have to be more strategic in their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down. Successful product managers in 2020 will have had a long-term view to the changes made in 2019,” said Lovelock.