Enterprise software to lead IT spending rebound in 2021


Sabina Weston

25 Jan, 2021

Enterprise software is expected to grow by 8.8% in 2021 as businesses seek to expand and improve remote work environments, according to new predictions from Gartner.

Global IT spending fell by 3.2% in 2020 as a result of the COVID pandemic, but the research firm expects spending this year to rise by 6.2% to a total of $3.9 trillion (£2.85 trillion) before surpassing the $4 trillion (£2.93 trillion) mark in 2022.

Enterprise software is expected to witness the strongest rebound followed by the devices segment, which is expected to see growth of 8% in 2021. Garner expects spending on data centre systems to increase by 6.2% during the 12-month period, while IT and communications services are predicted to grow by 6% and 4% respectively. 

Commenting on the predictions, Gartner distinguished research VP John-David Lovelock said that CIOs “have a balancing act to perform in 2021 — saving cash and expanding IT”.

“With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short Time to Value, will get more money and board-level attention going into 2021,” he added.

Gartner also projects that, through 2024, businesses will be forced to accelerate their digital transformation plans by at least five years in order to survive in a post-COVID world, where remote work and digital touchpoints will be the norm.

“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront,” said Lovelock. 

“Optimisation initiatives, such as hyperautomation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks.”

Moreover, non-COVID-19 geopolitical factors are expected to inhibit recovery for some regions, such as Brexit for the UK and the difficult China-US relations.