The data center systems sector will witness the biggest drop in 2019 with a decline of 2.8 per cent, due to expected lower average selling prices
IT spending worldwide is estimated to reach US$ 3.79 trillion in 2019, witnessing an increase of 1.1 per cent compared to last year, according to the latest report by research and advisory firm – Gartner, Inc.
In 2020, the overall IT spending is estimated to be US$ 3.92 trillion, recording a growth of 3.6 per cent over 2019.
As per the report, the data center systems sector will witness the biggest drop in 2019 with a decline of 2.8 per cent, due to expected lower average selling prices (ASPs) in the server market led by adjustments in the expected component costs pattern.
Shift in IT spending
The shift of IT spending in enterprises from non-cloud offerings to new, cloud-based alternatives continue to push growth in the enterprise software market. The market is estimated to reach US$ 427 billion in 2019, an increase of 7.1 per cent compared to US$ 399 billion in 2018. So far, the major cloud shift has occurred in the application software segment.
However, the report forecast increased growth for infrastructure software segment in the short-term, specifically in application platform-as-a-service (aPaaS) and integration platform-as-a-service (iPaaS).
Commenting on the findings, John-David Lovelock, Research Vice President at Gartner, said, “Currency headwinds fueled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter. 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.”
Lovelock further said, “In 2019, technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down. Successful product managers in 2020 will have had a long-term view to the changes made in 2019.”
