Global IT Spending Growing to $4 Trillion in 2021

By Chris Ehrlich

STAMFORD, Conn. — Spending on IT across the world is projected to increase 8.4% from $3.7 trillion in 2020 to over $4 trillion in 2021 — with 9% growth in IT services.

The forecast was released this month by the market research firm Gartner.

New digital initiatives will “more frequently” come from departments outside of IT, being charged as a cost of revenue or cost of goods sold, according to Gartner. 

“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 VP 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.”

Each of the five IT segments analyzed are expected to grow through 2022: data center systems; enterprise software; devices; IT services; and communications services.

Devices (14%) and enterprise software (10.8%) will see the largest growth, as organizations focus on providing a more “comfortable, innovative and productive environment” for their workforce. 

The Gartner quarterly IT spending forecast offers a perspective on IT spending across the hardware, software, IT services and telecommunications segments. 

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

Source: Gartner (April 2021)

A sales rep delivers a presentation to clients in a conference room. Courtesy Adobe

A sales rep delivers a presentation to clients in a conference room. Courtesy Adobe.

The increased focus on the employee experience and well-being are pushing investments in social, collaboration and human capital management software.

For the rest of 2021, CIOs will focus on completing digital plans to enhance, extend and transform their 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,” Lovelock said. “As hybrid work takes hold, CIOs will focus on spending that enables innovation, not just task completion.” 

Pandemic recovery

The economic recovery from the pandemic will vary “significantly” across countries, industries and IT segments, producing a “K-shape” recovery. 

For instance, spending by the banking and securities and insurance industries will “closely resemble” pre-pandemic levels as early as 2021.

Retail and transportation won’t recover until closer to 2023.

North America and western Europe are expected to recover in late 2021.

Latin America should recover in 2024.

In greater China, IT spending has already surpassed 2019 levels. 

Methodology

The IT spending forecast by Gartner “relies heavily” on the rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. 

The market research firm used primary and secondary research to build a database on market sizes for the forecast.

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