• Global IT spending is expected to grow by 6.2% to $3.9tr after a fall of 3.2% last year.
• IT spending in India is expected to grow by 6.8% to $88.8b after a fall of 2.7% last year.
• Digital initiatives directly related to improving customer engagement and supported with a shorter RoI window will be prioritised in the current economic environment.
• Businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-Covid-19 world that involves permanently higher adoption of remote work and digital touchpoints.

Enterprise software spending is expected to have the strongest rebound this year among global IT spending and it is expected to grow by 8.8 per cent compared to a fall of 2.4 per cent last year as remote work environments are expanded and improved.

In 2020, CIOs prioritised spending on technology and services that were deemed “mission-critical” during the initial stages of the pandemic. 

The unprecedented speed of digital transformation in 2020 to satisfy remote working, education and new social norms presented lockdowns and social distancing measures as double-edged swords – one which has abated the pandemic’s negative effect on IT spending going into the New Year.

“Enterprises 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,” John-David Lovelock, Distinguished Research Vice-President at Gartner.

Global information technology spending is expected to grow by 6.2 per cent to $3.9 trillion after a fall of 3.2 per cent last year.

In 2022, spending is expected to increase by 4.6 per cent to $4.1 trillion.

At the same time, IT spending in India is expected to grow by 6.8 per cent to $88.8 billion after a fall of 2.7 per cent last year.

In 2019, the IT spending stood at $92 billion.

 “Digital initiatives directly related to improving customer engagement and support with a shorter RoI window will be prioritised in the current economic environment. Improving demand scenario across select verticals in India will spur the overall IT spending in 2021,” Naveen Mishra, Senior Research Director at Gartner, said.

The devices segment is expected to grow by 8 per cent and data centre systems by 6.2 per cent.

Digital transformation plans to rev up

 “There is a combination of factors pushing the devices market higher as countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, enterprises 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,” Lovelock, said.

Through 2024, he said businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-Covid-19 world that involves permanently higher adoption of remote work and digital touchpoints. 

Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9 per cent from 2020. 

However, Lovelock said that 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.

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.

Despite the availability of vaccines for Covid-19, he said the virus will continue to require government health interventions throughout 2021 while non-Covid-19 geopolitical factors such as Brexit and the US-China tension will also inhibit recovery for some regions.

Overall, returning global recovery 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.

Covid-19 has shifted many industries’ techquilibrium, Lovelock said and added that 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,” he said.

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