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Gartner: Worldwide IT spending to reach $4 trillion in 2021

by Marco van der Hoeven

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 (see Table 1). The highest growth will 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.

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)
  2020 Spending 2020 Growth (%)   2021 Spending 2021 Growth (%)   2022 Spending 2022 Growth (%)  
Data Center Systems 219,940 2.3 236,806 7.7 247,513 4.5
Enterprise Software 466,647 -2.1 516,872 10.8 571,725 10.6
Devices 663,223 -6.9 755,798 14.0 778,949 3.1
IT Services 1,021,187 -1.8 1,112,626 9.0 1,193,461 7.3
Communications Services 1,386,471 -0.7 1,450,444 4.6 1,504,743 3.7
Overall IT 3,757,468 -2.2 4,072,547 8.4 4,296,391 5.5

 

As one example, the increased focus on the employee experience and well-being are propelling technology investments forward in areas such as social software and collaboration platforms and human capital management (HCM) software.

Although optimization and cost savings efforts won’t disappear simply because there’s more economic certainty in 2021, the focus for CIOs through the remainder of the year will be completing the digital business plans that are aimed at enhancing, extending and transforming the company’s value proposition.

“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,” said Mr. Lovelock.

Return to pre-pandemic spending levels varies

Recovery across countries, vertical industries and IT segments still varies significantly, prompting a K-shape economic recovery. From an industry perspective, banking and securities and insurance spending will closely resemble pre-pandemic levels as early as 2021, while retail and transportation won’t see the same recovery until closer to 2023.

Regionally, 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.

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