Building a slide deck, pitch, or presentation? Here are the big takeaways:
- Global IT spending will reach $3.86 trillion in 2018, an increase of 4.5% from the previous year. –Gartner, 2018
- In 2018, growth in IT spending will be driven by digital transformation, blockchain, IoT, machine learning, and AI. –Gartner, 2018
IT spending worldwide is set to hit $3.68 trillion by the end of 2018, according to research from Gartner unveiled in a Tuesday press release. That marks a 4.5% increase from the year prior.
With the ubiquity of computer technology in today’s society, the fact that IT spending is growing shouldn’t come as even a mild surprise. However, as Gartner research vice president John-David Lovelock wrote in the release, that growth will be driven by technologies like “blockchain, Internet of Things (IoT), and progression from big data to algorithms to machine learning to artificial intelligence (AI).”
The past year was an uncertain one for IT budgets, the release noted. And that uncertainty from 2017 will carry into 2018 in some capacity, but companies will continue to invest in IT as they anticipate growth in revenue.
SEE: Hiring kit: IT finance manager/budget director (Tech Pro Research)
Technologies such as IoT, blockchain, and AI aren’t necessarily taking up the biggest chunk of IT budgets–that distinction goes to communication services–but they are growing at a rapid clip. The fact that these technologies are driving IT budget growth lends them more legitimacy, and provides evidence that the enterprise may be seriously getting on board with them.
AI, alone, will generate some $2.9 trillion in business value by the year 2021, Lovelock said in the release. AI will also be responsible for recovering some 6.2 billion hours of worker productivity, he said.
“That business value is attributable to using AI to, for example, drive efficiency gains, create insights that personalize the customer experience, entice engagement and commerce, and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data,” Lovelock wrote in the release.
Deriving real value from AI will require a financial investment, the release said. But, AI can act as a “force multiplier,” leading to improved network effects and revenue generation, according to Lovelock.
Some of the strongest growth will come from enterprise software, the release said. Gartner predicts the IT segment to grow 9.5% in 2018 and an additional 8.4% in 2019. Shifts toward enterprise application software and software as a service (SaaS) models will help fuel this growth.
For the first time in two years, the device segment also grew in the year 2017, increasing 5.7% from the previous year. Gartner expects it to grow 5.6% in 2018 due, in part, to a slight increase in smartphone sales, the release said. PC sales are expected to be flat.