Gartner: Pre-COVID spending on IT won't return until 2022

IT spending will see modest growth this year driven by software and devices

IT spending won't return to pre-Covid levels until 2022, claims Garter as it publishes its forecasts for the rest of the year.

The analyst firm believes that, despite the availability of Covid vaccines, a return to pre-pandemic spending levels will be thwarted this year by continued government measures to contain the virus. Other non-Covid factors such as Brexit and US-China trade tension will also prevent a spending recovery in some regions, Gartner says.

"Overall, returning global recovery back to 2019 spending rates will not occur until 2022, although many countries may recover earlier. People-gathering industries, such as restaurants, travel, and entertainment, will hover at the bottom long-term," the firm said.

The prediction comes as Gartner forecasts worldwide IT spending to grow by just 6.2 per cent this year to $3.9tn.

It comes after spending fell by 3.2 per cent in 2020 as Covid forced CIOs to prioritise their spending on "mission-critical" technology and services.

Enterprise software is expected to be the highest growing segment this year, Gartner claims, with spending set to grow by 8.8 per cent to $505.72bn. Devices will be the second best performing segment with eight per cent growth to $705.42bn.

Gartner claims that the high growth in software will be due to businesses pushing to expand and improve their remote working environments, while growth in devices spending will be driven by a continued need for home learning and working.

"There are a combination of factors pushing the devices market higher," said John-David Lovelock, research VP at Gartner.

"As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, organisations are industrialising remote work for employees as quarantine measures keep employees at home and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020."

"CIOs have a balancing act to perform in 2021 — saving cash and expanding IT," he added.

"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."

Meanwhile, spending on datacentre systems and IT services will grow by 6.2 per cent and six per cent respectively to $228bn and $1.07tn.

Communication services spending will grow the slowest at 4.5 per cent to $1.41tn.

COVID-19 has shifted many industries' ‘techquilibrium'," said Lovelock. "Greater levels of digitalisation of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed."