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Enterprises opting for cloud-based solutions instead of 'traditional' IT offerings

(Image credit: Image Credit: Everything Possible / Shutterstock)

Businesses will spend less on data centre systems this year, than they have spent in the previous ten years. This is according to a new report by Gartner, which says the data centre systems segment is about to experience a 2.8 per cent decrease.

This is mostly because of the lower average selling prices in the server market, which came as a result of the adjustment in the pattern of expected component costs.

However, all things considered, the cloud is still eating away the traditional enterprise IT spending. Cloud-based ‘alternatives’ to traditional offerings are expected to reach $427 billion as a market, up 7.1 per cent, compared to the same period last year, when it hit $399bn.

The largest shift happened in application software, but Gartner believes infrastructure software segment will follow suit sooner, rather than later.

Looking at the market in general, IT spending is expected to rise 1.1 per cent compared to last year, and hit $3.79 trillion.

“Currency headwinds fuelled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter,” said John-David Lovelock, research vice president 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.

“In 2019, technology product managers will have to get more strategic around their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down,” said Mr Lovelock. “Successful product managers in 2020 will have had a long-term view to the changes made in 2019.”

Image Credit: Everything Possible / Shutterstock