Global IT spending to grow 0.6% in 2019

“Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur,” said Mr Lovelock.

The enterprise software market will experience the strongest growth in 2019, reaching $457 billion, up 9% from $419 billion in 2018 (see Table 1). CIOs are continuing to rebalance their technology portfolios, shifting investments from on-premises to off-premises capabilities.

As cloud becomes increasingly mainstream over the next few years, it will influence ever-greater portions of enterprise IT decisions, in particular system infrastructure. Prior to 2018, more of the cloud opportunity had been in application software and business process outsourcing. Over this forecast period it will expand to cover additional application software segments, including office suites, content services and collaboration services. “Spending in old technology segments, like data centre, will only continue to be dropped,” said Mr Lovelock.

Globally, consumer spending as a percentage of total spend is dropping every year in every region due to saturation and commoditisation, especially with PC, laptops and tablet devices. Cloud applications allow these devices to have an extended life, with less powerful equipment needed to run new software. This is why the devices market will experience the strongest decline in 2019, down 4.3% to $682 billion in 2019.

“There are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades,” said Mr Lovelock. “Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop.”