Worldwide IT spending is projected to total $4.1 trillion in 2021, an increase of 8.4% from 2020, according to the latest forecast by Gartner, Inc. The source of funds for new digital business initiatives will more frequently come from business departments outside IT and charged as a cost of revenue or cost of goods sold (COGS).
“IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” said John-David Lovelock, distinguished research vice president at Gartner. “Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”
All IT spending segments are forecast to have positive growth through 2022, but the highest growth is expected to come from devices (14%) and enterprise software (10.8%) as organizations shift their focus to providing a more comfortable, innovative and productive environment for their workforce.
“Last year, IT spending took the form of a ‘knee jerk’ reaction to enable a remote workforce in a matter of weeks. As hybrid work takes hold, CIOs will focus on spending that enables innovation, not just task completion,” added Lovelock.
From an industry perspective, banking and securities and insurance spending will likely resemble pre-pandemic levels as early as 2021, while retail and transportation won’t see the same recovery until closer to 2023.
Latin America is expected to recover in 2024, while Greater China has already surpassed 2019 IT spending levels. North America and Western Europe are both expected to recover in late 2021.
The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 1Q21 Update.”
While the data show across-the-board growth, it is interesting to note an industry shift in which IT takes a greater role in company strategic initiatives at the business level.