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  • Forecast: Systems Spending Steady, Up For Services And Software

    August 30, 2021 Timothy Prickett Morgan

    The individual IT budgets at the companies we work at exist in relation to – and often in stark contrast to – the overall market and to companies that are the same size as ours or in the same industry we play in. In this sense, IT spending forecasts from the several major IT market researchers set the pace for expectations, and people being what they are, they are affected (metaphorically speaking) in a relativistic fashion (size warps space and time) and in a quantum fashion (watching an experiment changes it). It gets hard to separate causes from effects in complex systems.

    And the IT market is one complex system, and so what the IT market researchers do is put out forecasts from time to time during a year, and not only do they change current and future data on spending, they often update the past as more information comes in. This very thing happened with the IT spending forecasts from the analysts at Gartner. The data for 2019 and 2020 changed, and quite a bit, and the forecasts for 2021 and 2022.

    Because all data exists across time, we try to put together the longest datasets we can when we analyze things, and we went back over the forecasts and updated forecasts to put together a dataset from the Gartner press releases that covers the eleven years from 2012 through 2020 plus two years of forecasts including this year and next year. Here is a summary table that gives you all of the raw data:

    And because trends are hard to see sometimes in such large numbers, here are the trend lines over this historical and forecast term for the key parts of IT spending that relates to datacenter spending:

     

    Just for reference: Datacenter systems means servers, storage, and switching hardware and operating systems for these devices; Enterprise software means all of that additional systems software, middleware, and application software that runs atop these systems. The cloud versions of these services – infrastructure as a service or software as a service – are not included in these categories, but rather are lumped into IT services. It is just as logical to put off-premises stuff into the IT services category as it is to try to figure out how much is being spent on hardware as a service and software as a service out there on the clouds of the world.

    In Gartner’s original forecast from earlier this year, datacenter systems spending in 2020 was thought to be much higher than it has turned out to be but was projected to be flat from 2019 to 2020; the new numbers are significantly lower – we are talking about $37 billion worldwide going away – but now Gartner calculates that datacenter systems spending rose by 2.5 percent to $178 billion in 2020 and will rise again by 7.4 percent to $192 billion in 2021 and is projecting that it will rise once more by 5.2 percent to $202 billion in 2022.

    Figures for spending on enterprise software, conversely, were raised for 2019 and 2020 and growth rates were also increased year-on-year for the historical data and for the forecasts in 2021 and 2022. So if you have been reckoning your company’s investments against the Gartner forecast from February of this year, you need to take a look at these figures. The ground has shifted for both IT continents, hardware and software. Ditto for spending on services, which had its levels increased in both the historical data and in the forecasts and had its growth rates jacked up, too.

    Spending on devices (Desktop and laptop PCs, tablets, smartphones, and workstations) had the same treatment, if this matters to you and how you think about your IT budget. We are very datacenter-centric in our thinking, and called the combination of spending on datacenter systems, enterprise software, and IT services Core IT, and it ignores communication services and devices, which together are a little more than half of IT spending these days, and down from close to two-thirds a decade ago.

    Anyway, now you have a dataset you can reckon yourself against. Do with it as you will.

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TFH Volume: 31 Issue: 55

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