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Report: IT spending to rise in 2019

October 22, 2018

Worldwide IT spending is predicted to hit $3.8 trillion in 2019, up 3.2 percent from this year’s expected total, according to Stamford-based IT consulting and research firm Gartner.

Currency volatility and the possible trade wars affect the sector’s outlook, but shifts from ownership of IT technology to subscription models are making a farther-reaching impact, Gartner officials said.

“What this signals, for example, is more enterprise use of cloud services — instead of buying their own servers, they are turning to the cloud,” John-David Lovelock, research vice president at Gartner, said in a statement. “As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business.”

Communications services would comprise the largest portion of IT spending next year, about $1.4 trillion, as they increased 1.2 percent.

IT services are expected to grow by 4.7 percent, accounting for about $1 trillion in spending. Economic challenges, combined with internal pressures to cut spending, are pushing organizations to look closely at business services including consulting.

In a recent Gartner study, 46 percent of organizations said IT services and supplier consolidation ranked among their three most-effective “cost-optimization” approaches.

Worldwide spending for devices — PCs, tablets and mobile phones — is projected to grow 2.4 percent in 2019, reaching $706 billion.

Demand for PCs in the corporate sector has been strong, underpinned by Windows 10 PC hardware upgrades that are anticipated to continue until 2020.

The PC market could be temporarily affected by a shortage of Intel computer processors, but Gartner officials do not expect any lasting impact on overall PC demand.

“PCs, laptops and tablets have reached a new equilibrium state,” Lovelock said. “These markets currently have stable demand from consumers and enterprises.”

Enterprise-software spending is expected to grow the most next year, by 8.3 percent, to $439 billion. More use of software-as-a-service, which relies on subscription-based licensed software, is catalyzing the growth, particularly in customer-relationship management, Gartner officials said.

Reflecting less demand for servers, data-center systems’ growth would slow to 1.6 percent, for a total of $195 billion.

Gartner’s IT spending forecasts are based on its analysis of sales by thousands of vendors’ sales of IT products and services.

pschott@scni.com; 203-964-2236; Twitter: @paulschott