It is that time of the year again when research firm Gartner reveals its IT spending predictions. Unlike previous years, the outlook for 2019 is not too positive, with a growth of only 1.1 percent predicted by the company.

This is a fairly significant drop compared to 2018, where the growth has at a far healthier 4.0 percent, according to Gartner’s findings.

Much of the reason for the downward trend this year is as a result of the US dollar, coupled with some of the economic issues facing the region of late.

Currency headwinds fuelled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter,” explains John-David Lovelock, research VP at Gartner.

“Through the remainder of 2019, the US dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars,” he anticipates. 

The research VP goes on to explain that this will force technology product managers to take a more strategic approach to their portfolio mix in 2019, opting for a more balanced ratio of products and services.

“Successful product managers in 2020 will have had a long-term view to the changes made in 2019,” he adds.

In terms of the segments which will suffer the biggest drops in 2019, also showcased in the table below, data centres suffer greatest at 2.8 percent, followed by devices at 1.9 percent. This as Gartner explains, is down to the fact that expected costs for servers have decreased as a result of cheaper components.

Worldwide IT Spending Forecast (Billions of US Dollars)

2018
Spending
2018
Growth (%)
2019
Spending
2019
Growth (%)
2020 Spending 2020 Growth (%)
Data Centre Systems 210 15.5 204 -2.8 207 1.7
Enterprise Software 399 9.3 427 7.1 462 8.2
Devices 667 0.3 655 -1.9 677 3.5
IT Services 982 5.5 1,016 3.5 1,065 4.8
Communications Services 1,489 2.1 1,487 -0.1 1,513 1.7
Overall IT 3,747 4 3,790 1.1 3,925 3.6

One of the other elements having an effect on IT spending are new technologies like artificial intelligence (AI) and the disruptive effect it potentially has. While CIOs are actively looking at these models, their role is often misunderstood, according to Lovelock.

“AI is not a product, it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry,” he says.

Despite 2019 being a rather lean year as far as growth in IT spending is concerned, Gartner is still cautiously optimistic about 2020’s outlook, with it expected to rise to 3.6 percent next year.

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