Special report: Tech budgets 2019: A CXO's guide (free PDF)

Provided by: TechRepublic
Topic: CXO
Format: PDF
Business leaders have begun to look ahead to next year and plan where to focus their technology resources. This ebook, based on the latest ZDNet/TechRepublic special feature, explores how decision makers will get the maximum benefit from their IT dollars.

From the ebook:

Gartner’s latest forecast, released in April, put worldwide IT spending for 2018 at $3.74 trillion, up 6.2 percent from 2017. Spending is projected to reach $3.85 trillion in 2019, up 2.8 percent from 2018. This year’s growth, in particular, looks good, but uncertainty and trade disputes once again raised their ugly heads in Gartner’s analysis:

“Although global IT spending is forecast to grow 6.2 percent this year, the declining U.S. dollar has caused currency tailwinds, which are the main reason for this strong growth,” said John-David Lovelock, research vice president at Gartner. “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. However, spending on IT around the world is growing at expected levels and is in line with expected global economic growth. Through 2018 and 2019, the U.S. dollar is expected to trend stronger while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars.”

Communications Services remains the biggest IT spending category across 2017-2019, although the growth rate is predicted to be relatively flat for 2018/19 (1.1%). Enterprise Software has been the fastest-growing category in all three years, peaking at 11.1 percent in 2017/18. Also noticeable in Gartner’s figures is steadily declining growth in spending on Data Center Systems, from 6.3 percent in 2016/17 to 1.1 percent in 2018/19. Growth in Devices (PCs, tablets and mobile phones) also drops to just 1.3 percent in 2018/19:

Gartner’s forecasting, which is elaborated further in this webinar, suggests that CxOs are likely to be spending more on enterprise application software, mobile devices, infrastructure software and business IT services in 2019 and beyond, and less on (on-premises) data center systems and associated services.

One mega-trend that’s gathering pace in business is technology spending controlled by lines of business (LOB) rather than the IT department. LOB spending—often called ‘shadow IT’—is set to overtake IT department spending in 2019 worldwide, according to analyst firm IDC. The LOB/IT split is currently around 50:50, but LOB spending has been growing faster than IT spending for several years and is forecast to be 6.9 percent versus 3.3 percent (CAGR) between 2016 and 2021. By 2021, only two of the 16 industries profiled in IDC’s spending guide—construction and telecommunications—will still see their technology spending led by the IT department.

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