IT Spending Will Climb 6 Percent To Hit $3.9T In 2021: Gartner

To survive a post-COVID-19 world that involves higher adoption of remote work, businesses are accelerating their digital transformation initiatives in 2021 with worldwide IT spending to reach $3.92 trillion, says Gartner.

All of the major technology markets – from software and devices to IT services and communications – will experience annual sales growth in 2021 compared to 2020 as businesses across the globe will increase IT investments, according to new data from Gartner.

The market research firm is projecting total worldwide IT spending to reach $3.92 trillion in 2021, up 6 percent compared to 2020 when organizations paused IT spending in certain areas due to the global COVID-19 pandemic. All IT spending market segments will return to growth this year in contrast to 2020 when each segment saw overall sales drop single digits.

The strongest growth will be in enterprise software sales, which is expected to grow 8.8 percent annually to $505 billion in 2021. Global IT device spending is predicted to reach $705 billion, up 8 percent year over year.

The largest IT spending area in 2021 will be around communications services, expected to hit $1.41 trillion, representing an increase of 4.5 percent compared to 2020.

“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” said John-David Lovelock, distinguished research vice president at Gartner, in a statement. “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.”

[Related: Dell, HPE Lead Public Cloud Infrastructure Spending Binge]

IT services spending will grow 6 percent to $1.07 trillion in 2021, Gartner forecasts. Spending in the smallest market segment, data center systems, is expected to increase 6 percent to $228 billion this year.

In 2020, worldwide spending on IT decreased 3.2 percent to $3.69 trillion as companies across the globe prioritized spending on technology and services deemed mission critical during the COVID-19 pandemic.

Over the next four years, businesses will accelerate their digital transformation plans by “at least five years” to survive a post-COVID-19 world that involves higher adoption of remote work and digital touchpoints, said Gartner’s Lovelock.

“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. Optimization 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,” said Lovelock.

Lovelock said the biggest change in 2021 compared to other years will be how organizations finance their technology needs, “not necessarily how much IT is financed.”

The Stamford, Conn.-based market research firm’s spending forecast methodology revolves around analysis of sales by thousands of vendors across IT products and services.