IT spending has fallen significantly this year as a result of the coronavirus pandemic, but the market is expected to bounce back quickly in 2021.
This is according to a new report from market analysts at Gartner, which claims a rebound will be fuelled by an acceleration of digital transformation efforts as businesses prepare for remote and hybrid working in the long term.
This year, global IT spending is expected to reach $3.6 trillion, down 5.4 percent from the year before. However, spending is projected to total $3.8 trillion in 2021 - an increase of four percent on this year.
Spending across all IT segments is expected to drop in 2020, but not all will rebound as strongly. Enterprise Software, for example, is expected to record 7.2 percent growth, but Communication Services is only set to grow by 2.8 percent.
The report also states that most companies will no longer view digital transformation as a driver of growth but rather as a means of survival. For that reason, it will not be subject to the same ROI justification.
“The spending slowdown that took place from roughly April through August of this year, coupled with cloud service providers’ ‘try before you buy’ programmes, is shifting cloud revenue out of 2020,” said John-David Lovelock, Distinguished Research Vice President at Gartner.
“Cloud had a proof point this year — it worked throughout the pandemic, it scaled up and it scaled down. This proof point will allow for accelerated penetration of cloud through 2022.”
“With revenue uncertainty promoting cash from being King to being Emperor, CIOs are now prioritising IT projects where the time to value is lowest,” Lovelock concluded.