IT Investments will Increase for Tech Companies to Battle Recession: Report

Businesses aiming to avoid the worst effects of the recession by advancing IT. Expenditure on software and services will account for the majority of this growth.

Highlights

  • The result of inflation eroding consumer buying power.
  • Firms increasingly view IT as a tool to save money on other activities.
  • Increase in IT spending to support organisations' ability to grow without increasing staff.

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Even if some analysts forecast a recession in 2023, global spending on IT goods and services will increase in 2019, according to a study issued today by Gartner Research. Businesses aiming to avoid the worst effects of the recession by advancing IT efforts meant to save long-term investment, the report said, are represented by a steady 5.1% growth to a predicted total of $4.6 trillion.

The Global Software Market Is Expected To Increase

As per Gartner, expenditure on software and services will account for the majority of this growth. Around $790 billion will be spent on software globally this year; $879 billion will be spent in 2023, an increase of 11.3%. Similar to this, spending on IT services will climb from $1.25 trillion in 2022 to $1.35 trillion the following year, representing a 7.9% growth rate.

Spending on end-user devices, which Gartner forecasts would fall from $739 billion this year to $735 billion in 2023, will be the only category to experience a dip. Although it is a considerably lesser fall than what would be observed between 2021 and 2022, it is the result of inflation eroding consumer buying power. The projected growth in data centre spending for the following year is only 3.4%, from $209 billion this year to $216 billion in 2023.

The report's author, John-David Lovelock, a distinguished VP analyst at Gartner, predicts that investment on data centres and other on-premises infrastructure will be distributed fairly evenly, with no particular types of equipment expected to be given higher priority. Thus, when they look at the data, they see that servers are running, as well as storage, software licences, maintenance, and even consulting services to keep data centres operational, according to him. All of that is enough to keep the numbers being processed locally.

As firms increasingly view IT as a tool to save money on other activities, rather than as a cost centre, spending is likely to increase even in the midst of a recession, claims the paper. As businesses get ready to tighten their belts, line-of-business optimizations meant to make them run more efficiently are becoming more and more sought after. IT advancements can help make these efficiencies a reality.

Our payroll department will probably expand if our business goes well and if they increase from 5,000 to 10,000 employees, but it might not necessarily, said Lovelock. The largest shift over the next six months will be the return and repositioning of technology to support internal processes, as well as an increase in IT spending to support organisations' ability to grow without increasing staff.

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