Gartner: 2021 IT spending rally could hit $3.9tn

Business Process Automation
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Businesses need to advance their digital transformation plans five years to survive in a post-pandemic world

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25 January 2021 | 0

Gartner projects worldwide IT spending will total $3.9 trillion in 2021, an increase of 6.2% over 2020 when spending declined a little over 3%.

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%, as remote work environments are expanded and improved. The devices segment will see the second highest growth in, 8%, 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.”

 

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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 hyperautomation, 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 hyperautomation involves combining machine learning (ML), packaged-software and automation tools to deliver work, Gartner says. 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% of commercial organisations to undertake dozens of hyperautomation initiatives as a result, Gartner says.

Lovelock stated that companies will be forced to accelerate digital business transformation plans by at least five years to survive in a post-Covid world that involves permanently higher adoption of remote work and digital touchpoints. Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9% 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 8% 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. Optimisation initiatives, such as hyperautomation, will continue, and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks,” Lovelock stated.

“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,” Lovelock stated.

IDG News Service

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