Companies will spend $3.7 trillion on IT in 2018, led by trendy new tech like blockchain, IoT and AI
- Businesses are gearing up for a healthy 2018 and will increase their spending on IT projects to support planned growth.
- Overall IT spending is estimated to grow to $3.7 trillion in 2018, up 4.5% over 2017 spending, reports market researcher Gartner
- Up-and-coming new tech like artificial intelligence, internet of things and even blockchain is driving the increase.
The IT industry is expected to be a $3.7 trillion market in 2018, according to market research firm Gartner.
Businesses plan to increase spending in all areas including enterprise software, devices (PCs, tablets, phones), IT services, communications services (telecom, networking).
Companies even plan to slightly increase their spending on their data centers in 2018, although that's the area slated for the least amount of growth as companies continue to shift towards cloud computing where they rent infrastructure tech from others, paying only for what they use. In 2019, Gartner predicts that data center spending will be officially on the decline.
Gartner's John-David Lovelock, research vice president, believes that trendy up-and-coming technologies are driving the increase in spending in 2018. Companies are moving from big data projects (collecting, organizing and analyzing giants amounts of data) to artificial intelligence projects that sit on top of that big data.
AI will help companies automate tasks, doing low-hanging, repetitive jobs and freeing humans to work on more complex tasks. Companies are first targeting AI projects for customer service, marketing and commerce, areas that will help generate revenue, Lovelock believes.
Projects involving the so-called Internet of Things (IoT) are also part of IT budgets this year. IoT is the trend of putting sensors and apps into every day objects, from security cameras to washing machines. It's a big push in industrial areas like manufacturing and logistics.
Another hot tech in the enterprise this year is blockchain, says Gartner's Lovelock. Although often associated with Bitcoin and other crypto currencies, blockchain technology is getting increasing attention from private enterprises. Blockchain creates a secure, permanent and "distributed" ledger, meaning a ledger is stored in multiple places and it can allow companies to securely conduct transactions directly with one another without an intermediary.
Transactions involving global payments, supply chain, selling things digitally are the obvious first use cases.
Blockchain technologies that allow enterprises to set up their own private blockchain apps and ledgers, are being offered by traditional tech vendors (IBM, Microsoft, for example), to startups (Ripple, Digital Asset Holdings) and they are also being developed by consortiums like Hyperledger (backed by the Linux Foundation) and R3 (backed by banks, IT vendors, others).
Here's the general breakdown in where Gartner expects the most spending to occur this year.
Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)
2017 Spending | 2017 Growth (%) | 2018 Spending | 2018 Growth (%) | 2019Spending | 2019Growth (%) | |
Data Center Systems | 178 | 4.4 | 179 | 0.6 | 179 | -0.2 |
Enterprise Software | 355 | 8.9 | 389 | 9.5 | 421 | 8.4 |
Devices | 667 | 5.7 | 704 | 5.6 | 710 | 0.9 |
IT Services | 933 | 4.3 | 985 | 5.5 | 1,030 | 4.6 |
Communications Services | 1,393 | 1.3 | 1,427 | 2.4 | 1,443 | 1.1 |
Overall IT | 3,527 | 3.8 | 3,683 | 4.5 | 3,784 | 2.7 |
Source: Gartner (January 2018)
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