Shrugging off slowdown, global IT spending to rise 3.7 per cent in 2020

Our Bureau Hyderabad | Updated on October 30, 2019

Device market suffers; security and cloud spending surge

Here’s a piece of good news for the Indian IT industry. After a lull in spending in 2019, global IT spending is likely to go up by 3.7 per cent in 2020, due primarily to enterprise software spending. The IT spend this year is pegged at $3.7 trillion in 2019, a marginal increase of 0.4 per cent over the 2018 figure.

Despite the ongoing tariff war, IT spending in the US is forecast to grow 3.5 per cent in 2019, but that in China is expected to grow at only a dismal 0.1 per cent.

“Tariffs do not have a direct effect on IT spending, yet. Should tariffs extend to devices such as PCs and mobile phones, we will likely see manufacturers switch supply routes to minimise costs and have their technology made outside China,” John-David Lovelock, Research Vice-President at Gartner, said in a statement on Wednesday.

“Global IT spending, however, is expected to rebound in 2020 with a growth of 3.7 per cent, due primarily to enterprise software spending,” consulting and research firm Garnter Inc, has said.

“The slowdown in IT spending in 2019 is not expected to stretch as far into 2020, despite concerns over a recession and companies cutting back on discretionary IT spending,” John-David Lovelock said.


Security spending up

Prompted by regulatory compliance issues, companies are spending more on IT security. Gartner expects that spending on security would increase by 10.5 per cent in 2019, with cloud security projected to grow 41.2 per cent over the next five years.

“This is not just about keeping the ‘bad guys’ out. It is also about the growing need to be compliant with tariffs and trade policy, intellectual property rights, and privacy laws,” he said.

The devices market will , however, see the sharpest spending decline among all segments in 2019, down 5.3 per cent from $713 billion in 2018. This segment is, however, expected to see a modest growth of 1.2 per cent in 2020.

Cloud adoption

The US leads in cloud adoption and accounts for over half of the global spending on cloud. Some countries lag by one to seven years in cloud adoption rates. The UK and China, too, witnessed high cloud spending.

Published on October 30, 2019

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