The combined total of spending on IT around the globe is expected to be an eye-watering £2.86 trillion in 2019, a modest increase of 0.4% from 2018.
According to the forecast by analyst house Gartner, the data centre systems market won’t even achieve this level of increase. However, the good news for Scotland's tech sector is spending on cloud in the UK is holding up and has room for improvement.
For this year, that market is set to achieve £158 billion in expenditure, but that would represent a 2.5% drop on the 2018 figure. Next year, the data centre systems market will return to growth, with a 2.6% increase to £162.5 billion, but will retreat to lower growth in 2021.
Total global IT spending is expected to 'rebound' in 2020, said Gartner, with forecast growth of 3.7%, primarily due to more enterprise software spending.
“The slowdown in IT spending in 2019 is not expected to stretch as far into 2020 despite concerns over a recession and companies cutting back on discretionary IT spending,” said John-David Lovelock, research vice president at Gartner.
Overall spending on security increased by 10.5% in 2019, with cloud security projected to grow 41.2% over the next five years.
“This is not just about keeping the ‘bad guys’ out,” said Lovelock. “It is also about the expanding need to be compliant with tariffs and trade policy, intellectual property rights and with the multiple and sometimes overlapping privacy laws.”
Despite the ongoing tariff war, US IT spending is forecast to grow by 3.5% in 2019, but IT spending in China is expected to grow only 0.1%. “Tariffs do not have a direct effect on IT spending, yet,” said Lovelock. “Should tariffs extend to devices like PCs and mobile phones, we will likely see manufacturers switch supply routes to minimise costs and have their technology made outside of China.”
The device market will see the sharpest spending decline among all segments in 2019, down 5.3% from £551 billion in 2018. However, the market is expected to see modest growth of 1.2% in 2020.
“Similar to how consumers have reached a threshold for upgrading to new technology and applications, technology general managers and product managers should invest only in the next generation of products that will push them closer to becoming a true technology company,” said Lovelock.
The US is leading cloud adoption and accounts for over half of global spending on cloud. In some cases, countries that Gartner tracks lag one to seven years behind the US in cloud adoption rates.
“For perspective, the country directly behind the US in cloud spending is the UK, which only spends 8% on public cloud services.” said Lovelock. “An interesting outlier is China, which has the highest growth of cloud spending out of all countries. While China is closing the spending gap, it still will not reach US levels by 2023,” he said.