Gartner Finds IT Industry on Track for Strong Growth in 2018, 2019

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Gartner Finds IT Industry on Track for Strong Growth in 2018, 2019

As it does each year, the Gartner research firm has examined the IT industry’s performance for the year that just ended and projects out over the next two years to see how the business will evolve. Gartner’s findings, released 16, indicate IT industry is on solid footing and will likely continue on a path for year-over-year growth in 2018 and 2019. This is due in large part to continuing success in the enormous Communications Services industry and decisive influence it has over the rest of the IT industry. It also helped IT services and enterprise software sales continue to soar. But even with all the good news Gartner wondered whether a possible global recession or the turmoil over Brexit in Europe might derail what should the general trend favoring growth. Read on to learn more from Gartner’s Global IT Spending report.

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IT Industry Spending Grew at a Healthy Clip in 2017

The IT industry has been growing and will remain growing for the coming years. In 2017, total IT industry spending hit $3.5 trillion worldwide, a 3.8 percent growth rate compared to 2016. That figure will jump to $3.7 trillion this year and $3.8 trillion in 2019, according to Gartner.

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Slower Data Center Systems Spending Ahead

According to Gartner, worldwide Data Center Systems spending hit $178 billion in 2017, up 4.4 percent compared to 2016. However, it predicted that in 2018 data center spending till total $179 billion equal to an anemic 0.6 percent growth rate. In 2019, spending in the Data Center Systems market could actually fall 0.2 percent.

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Enterprise Software Spending to Grow the Most

When it comes to year-over-year growth, there’s no topping Enterprise Software. In 2017, total spending on Enterprise Software reached $355 billion, an 8.9 percent year-over-year growth rate. In 2018, spending will rise 9.5 percent to $389 billion. By the end of 2019, Enterprise Software spending will top $421 billion, up 8.4 percent compared to the prior year.

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Gartner Predicts a Sharp Slowdown in Device Spending by 2019

In 2017, companies around the globe spent $667 billion on devices, or about 5.7 percent more than they spent in 2016. In 2018, they’re expected to spend $704 billion, a 5.6 percent growth rate. But in a somewhat surprising revelation, Gartner said that Devices spending in 2019 will rise by just 0.9 percent to $710 billion.

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IT Services Remain Strong

IT Services remain one of the most important components in the broader IT industry. In 2017, total IT Services spending was up 4.3 percent to $933 billion. In 2018, IT Services spending will jump 5.5 percent to $985 billion. In 2019, according to Gartner, IT Services will generate $1 trillion in revenue, becoming the second IT industry segment to earn more than $1 trillion in a year.

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Communications Services Remains the Largest Market Segment

Communications Services remain the leading segment in the broader IT industry with $1.4 trillion in total spending in 2017. Looking ahead to 2018, Gartner forecasts Communications Services spending to grow 2.4 percent to $1.4 trillion. In 2019, it will grow to nearly $1.5 trillion, a 1.1 percent growth rate.

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Brexit, Global Recession Fears Temper Optimism

Although things are looking up for 2018, there are some concerns for 2019, where total industry spending growth will fall from 4.5 percent in 2018 to 2.7 percent in 2019. According to Gartner, it believes there’s a possibility of a “global recession” that could cause budgets to decrease. The researcher also cautioned about the possibility that Brexit turmoil in the European Union and “currency fluctuations” will hurt the IT industry.

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Where Companies Are Shifting Spending

In its evaluation of the industry, Gartner discovered that companies are increasingly shifting their spending patterns. While many companies are shifting away from Data Center Systems, Gartner found that they’re increasingly investing in Blockchain and the Internet of Things technology.  Rather than spending more on big data systems, enterprises see greater value in algorithms, machine learning, and artificial intelligence.

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Enterprise Spending on SaaS Apps Remains Strong

Enterprise interest Software as a Service continues to be strong with an increasing number of companies dedicating significant portions of their budgets to SaaS and cloud services. According to Gartner, companies are dramatically increasing spending on financial management systems, human capital management and data analytics applications, Gartner found.

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Enterprise Spending on iOS devices to Grow Strongly in 2018

Apple’s latest handsets, the iPhone 8 and iPhone X, had “minimal” impact on overall Device purchases in 2017, according to Gartner. However, Gartner believes that the corporate world finds value in iPhones and iPads and overall spending on iOS-based devices in 2018 will grow by 9.1 percent. Gartner’s report didn’t include an estimate of how many units Apple will sell to corporate users this year.

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