Global IT spending to grow with record highs for enterprise software

TODAY’s enterprise needs to think hard about its digital transformation and digital maturity journeys to retain its competitive edge in the market and meet customer expectations.

As a result, the world’s spending on IT is bound to grow. By how much? According to Gartner‘s latest report, spending will rise to total US$3.7 trillion in 2018, an increase of 6.2 percent from 2017.

The research giant’s study found that enterprise software spending is forecast to experience the highest growth in 2018 with an 11.1 percent increase.

Barring unexpected disruption, Gartner believes that the software industry can continue capitalizing on the evolution of digital business.

It also forecasts that application software spending will continue to rise through 2019, and infrastructure software will also grow, both of which will be bolstered by enterprise-wide modernization initiatives.

According to the report, worldwide spending on data center systems is forecast to grow 3.7 percent in 2018 and the worldwide spending for devices — PCs, tablets and mobile phones — is forecast to grow in 2018, reaching US$706 billion.

Analysts believe that the device market will continue to see dual dynamics – where some users will hold back from buying although those that do make a purchase will do so, on average, at higher price points. As a result, end-user spending will increase faster than units through 2022.

However, total end-user spending and unit shipments are expected to be lower compared with previous forecasts, as demand for ultramobile premium devices, ultramobile utility devices, and basic phones is expected to be low.

“Although global IT spending is forecast to grow 6.2 percent this year, the declining U.S. dollar has caused currency tailwinds, which is the main reason for this strong growth,” said John-David Lovelock, Research Vice President, Gartner.

“This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth. However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth. Through 2018 and 2019, the U.S. dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars,” added Lovelock.

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