Worldwide IT spending is projected to total $3.9 trillion in 2021, an increase of 6.2% from 2020, according to the latest forecast by Gartner, Inc. Worldwide IT spending declined 3.2% in 2020 as CIOs prioritized spending on technology and services that were deemed “mission-critical” during the initial stages of the pandemic.
The unprecedented speed of digital transformation in 2020 to satisfy remote working, education and new social norms presented lockdowns and social distancing measures as double-edged swords – one which has abated the pandemic’s negative effect on IT spending going into the New Year.
“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” said John-David Lovelock, distinguished research vice president at Gartner. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board level attention going into 2021.”
All IT spending segments are forecast to return to growth in 2021. Enterprise software is expected to have the strongest rebound (8.8%) as remote work environments are expanded and improved. The devices segment will see the second highest growth in 2021 (8%) and is projected to reach $705.4 billion in IT spending.
Through 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-COVID-19 world that involves permanently higher adoption of remote work and digital touchpoints. Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9% from 2020.
Despite the availability of COVID-19 vaccines, the virus will continue to require government health interventions throughout 2021. Non-COVID-19 geopolitical factors such as Brexit and the U.S.-China tension will also inhibit recovery for some regions.
Overall, returning global recovery back to 2019 spending rates will not occur until 2022, although many countries may recover earlier. People-gathering industries, such as restaurants, travel and entertainment, will hover at the bottom long-term.
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