IT spending to reach $3.7 trillion


Research firm Gartner forecasts spending in information technology (IT) in 2018 to increase by 4.5% from 2017 levels, to reach $3.7 trillion.

Josh David Lovelock, vice president of research at Gartner, said: “Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organisations consider the potential of Brexit, currency fluctuations, and a possible global recession.

“Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift. Projects in digital business, blockchain, IoT, and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth.”

According to Lovelock, the key areas driving spending over the next few years forecasts $2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity.

“That business value is attributable to using AI to, for example, drive efficiency gains, create insights that personalize the customer experience, entice engagement and commerce, and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data,” explained Lovelock.

Sector forecasts

The communications sector is expected to generate the highest revenue with spending increasing by 2.4% to reach $1.3 trillion in 2018.

Enterprise software segment will witness the strongest growth ahead other sectors.

Spending on Enterprise software is expected to increase by 9.5% to reach $355 billion in 2018 and by 8.4% in 2019 to reach $421 billion.

The majority of the spending on enterprise software will be directed towards software as a service (SaaS).

According to Gartner, the emergence of SaaS solutions is driving spending on IT in fields including financial and human capital management.

The devices segment is projected to grow by 5.6%. Last year, the segment recorded a growth for the first time in two years as it increased by 5.7%.

The impact of the iPhone 8 and iPhone X was minimal in 2017, as expected; however consumer spending on mobile phones is expected to rise and iOS shipments are expected to grow 9.1% in 2018.

PC growth is expected to be flat in 2018 even as continued Windows 10 migration is expected to drive positive growth in the business market in China, Latin America and Eastern Europe.

“Capturing the potential business value will require spending, especially when seeking the more near-term cost savings. Spending on AI for customer experience and revenue generation will likely benefit from AI being a force multiplier — the cost to implement will be exceeded by the positive network effects and resulting increase in revenue,” said Lovelock.

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Nicholas Nhede is an experienced energy sector writer based in Clarion Event's Cape Town office. He has been writing for Smart Energy International’s print and online media platforms since 2015, on topics including metering, smart grids, renewable energy, the Internet of Things, distributed energy resources and smart cities. Originally from Zimbabwe, Nicholas holds a diploma in Journalism and Communication Studies. Nicholas has a passion for how technology can be used to accelerate the energy transition and combat climate change.