After a year of pandemic-fueled declines, IT spending is set to rebound strongly in 2021. In a new forecast, Gartner predicts worldwide IT spending will total $4.1 trillion this year, an increase of 8.4 percent from 2020. Gartner said IT spending decreased 2.2 percent last year “as CIOs prioritized spending on technology and services that were deemed ‘mission-critical’ during the initial stages of the pandemic.”
Last year’s cutback in IT spending could have been much worse. Gartner said “the unprecedented speed of digital transformation in 2020” as companies added technology-driven remote-work solutions “abated the pandemic’s negative effect” toward the end of the year.
Gartner says all five categories of IT spending are set to increase this year. In 2020, four of the five categories were lower. The biggest percentage gain will be in devices, which Gartner projects will grow 14 percent to $755 billion. The communications services category will draw the most IT spending dollars in 2021 — $1.45 trillion, up 4.6 percent from 2020. Looking ahead to 2022, Gartner sees all five IT categories growing by a combined 5.5 percent, translating into IT spending of $4.3 trillion.
|2020 spending||2020 growth (%)||2021 spending||2021 growth (%)|
|Datacenter Systems||$219 billion||2.3||$236 billion||7.7|
|Enterprise Software||$466 billion||-2.1||$516 billion||10.8|
|Devices||$663 billion||-6.9||$755 billion||14.0|
|IT Services||$1.02 trillion||-1.8||$1.11 trillion||9.0|
|Communications Services||$1.38 trillion||-0.7||$1.45 trillion||4.6|
|Overall IT||$3.75 trillion||-2.2%||$4.07 trillion||8.4%|
Remote work is here to stay, and as it did in 2020, it will attract considerable IT spending in 2021. In an earlier forecast, Gartner said IT spending related to remote work will be $332.9 billion this year, up 4.9 percent from 2020. Specifically, companies are expected to open their IT spending checkbooks for cloud computing projects and cybersecurity to make remote work easier and safer, as some companies adopt a hybrid model combining in-office and remote work.
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.
— John-David Lovelock, distinguished research vice president at Gartner
Even with the increase in IT spending in 2021, Gartner notes that recovery won’t be universal. It says “people-gathering industries” — restaurants, hospitality, travel, and entertainment — “will hover at the bottom long-term.” But Gartner expects banking, securities, and insurance IT spending “will closely resemble pre-pandemic levels” by the end of this year.
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