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2018 IT Spending Trends Predicted by Gartner and IDC
Information Technology is no longer simply an added function of a business, it is now a major driving force in achieving greatness. Statistics show that the most successful businesses have the ability to adapt to new technology. In conjunction with this trend, businesses are increasingly realizing their need to utilize an IT partner to keep up with the IT growth within their organizations.
In April of this year, Gartner reports Global IT Spending in 2018 will experience the highest increase at 6.2% up from 3.8% in 2017.
John-David Lovelock, research vice president at Gartner said, “This is the highest annual growth rate that Gartner has forecast since 2007 and would be a sign of a new cycle of IT growth.”
Let’s break down the IT spending forecast this year from top technology research firm, Gartner:
- 2017 spending on IT Services = $933 billion
- 2018 spending on IT Services will hit a record $985 billion and continue to rise.
- 2019 spending on IT Services should reach $1.03 trillion according to research firm predictions.
- Device Spending in 2018 is estimated to reach $704 billion with a leveling-off expected for 2019.
- IT Growth Trends for 2018 reported by Gartner show the largest percentage growth will be in Enterprise Software purchasing at 9.5 percent up slightly from 8.9 percent in 2017.
- IT Services reaches 5.5 percent growth from 4.3 percent in 2017.
- Data Center spending drops nearly 4 percent in 2018 according to researchers.
In addition to Gartner’s IT Spending Trends report, International Data Corporation (IDC) conducts a similar semi-annual study. The 2018 IDC report focuses on “Global IT Spending for the SMB,” predicting small and mid-sized businesses will spend a collective $602 billion on IT software and services.
SMB IT spending defined by company size:
- More than two thirds of the $602 billion in IT spending globally, will be driven by firms with 100-999 employees through 2021.
- Within the mid-market segment, medium-sized businesses (100-499 employees) will spend $229 billion in 2018.
- Large businesses (500-999 employees) will spend $182 billion.
- Small businesses with fewer than 100 employees will see IT spending growth of 4.7 percent over the five-year forecast period.
The U.S. leads in SMB spending on IT in 2018. Here’s a snippet of the global IT spending for the SMB:
- The United States is the largest market for SMB spending with this year hitting a record $186 billion on IT, according to the IDC report.
- China comes in well below the U.S. for IT spending at $56 billion
- Germany IT spending for SMB’s reaching $37 billion
- The U.K. IT spending for SMB’s is projected to be slightly under Germany at $36 billion.
Statistics from the IDC report broken down even more:
- IT spending in the SMB market is expected to expand by $84 billion dollars over the next 5 years.
- Of the $602 billion in IT spending globally, $115 billion this year alone will be on devices (PCs, mobile phones and peripherals)
- The second largest spend will be on software applications at $99 billion this year.
Spending on IT products and services by the SMB is at an all-time high and for good reason. The value that information technology presents to businesses of all sizes cannot be debated when considering the trends of the last decade. Budgeting for technology upgrades and developing a plan for technology investment for the future of your business used to be an afterthought. In the age of digital transformation, budgeting for technology is now the main conversation.