Global IT spending to grow at 3.7% in 2020 - Gartner

According to the latest forecast by Gartner, Worldwide IT spending is projected to total $3.7 trillion in 2019, an increase of 0.4% from 2018. This is the lowest forecast growth in 2019 so far. Global IT spending is expected to rebound in 2020 with forecast growth of 3.7%, primarily due to enterprise software spending.

John-David Lovelock, research vice president at Gartner, says, “The slowdown in IT spending in 2019 is not expected to stretch as far into 2020 despite concerns over a recession and companies cutting back on discretionary IT spending.”

Gartner analysts are discussing the emerging trends that are driving the digital society and IT spending during Gartner IT Symposium/Xpo, taking place here through Thursday.

Today’s complex geopolitical environment has pushed regulatory compliance to the top of organizations’ priority list. Overall spending on security increased 10.5% in 2019, with cloud security projected to grow 41.2% over the next five years. “This is not just about keeping the ‘bad guys’ out,” said Mr. Lovelock. “It is also about the expanding need to be compliant with tariffs and trade policy, intellectual property rights, and even with the multiple and sometimes overlapping privacy laws.”

Despite the ongoing tariff war, U.S. IT spending is forecast to grow 3.5% in 2019, but IT spending in China is expected to grow only 0.1%. The device market will see the sharpest spending decline among all segments in 2019, down 5.3% from $713 billion in 2018. However, the market is expected to see modest growth of 1.2% in 2020.

IT spending growth is being driven by the rest of the world catching up on cloud spending. The U.S. is leading cloud adoption and accounts for over half of global spending on cloud. In some cases, countries that Gartner tracks lag one to seven years in cloud adoption rates.

Gartner predicts that organizations with a high percentage of IT spending dedicated to the cloud will become the recognized digital leaders in the future.

Lovelock says, “Most companies are caught trying to either cut costs or invest for growth, but the top-performing enterprises are doing both. A core challenge facing the industry is how organizations can operate as both a traditional company and a technology company at the same time. These ‘and’ dilemmas will drive future IT spending trends.”