Gartner predicted an 8% decline in IT spending for 2020 when we visited the topic of IT expenditures last, back in May. This was a far more gloomy forecast than the positive one Gartner published in January, just before COVID-19 took hold across the United States. Budgetary restrictions were imposed on businesses of all sizes.
Five months on, and the future looks brighter. According to industry reports and experts from various industries, spending on everything data center services and cloud services, as well as SaaS and security measures, will continue to rise until 2021.
The latest State of IT Report by Spiceworks Ziff Davis states: “During the rapid rush towards remote work, IT departments around the world deployed technologies quickly to maintain business continuity in the face of the global health crisis.” The massive shift to work-from-home policies prompted changes in software, hardware, and service spending. This will continue to cause waves as more companies adopt flexible working arrangements.
According to Gartner, the spending on Data Center Systems will grow by 6 percent in 2021 and continue to increase through 2024. Gartner’s senior research director, Naveen Mishra, said that the priority of most companies is to keep the lights on in 2020. So, the growth of data centers is being held back until the market enters the recovery phase. Gartner predicts that larger enterprise data centers will temporarily pause expansion plans and resume them later this year or in early 2019. Hyperscalers, however, will continue to expand globally due to the continued investment in the public cloud.
IDC reports that since virtualization has been adopted by almost every industry, demand for IT infrastructure has increased significantly. This has led to a 34.4 percent increase in revenue year-over-year. IDC also found that spending on private and public cloud infrastructure grew by 47.8 percent and 7 percent, respectively. This is the first time that traditional noncloud IT has been pushed to the back of budgets. The upward trend will continue until 2023, with a growth rate of at least 5 percent per year.
It’s not surprising that spending on cybersecurity has also increased. The highly-trained professionals who know how security can contribute to growth in business are the real rock stars of technology, demanding high salaries and working from home.
According to the 2020 Harvey Nash/KPMG CIO survey, which includes more than 4,200 IT executives’ input, “[W]ith increasing cyber risks, companies will increasingly turn towards outsourced or managed service providers to keep their systems resilient against attacks.” While some large organizations eliminate Chief Information Security Officers (CISOs) on-site, many small and medium-sized companies add Virtual CISOs in order to bolster their security. These specialists are increasingly seen as an investment that is more strategic than a luxury. In our latest blog, you can learn more about Mindsight’s virtual CISO.
Eric White, Mindsight’s Chief Technology Officer and Solution Architect, says that the pandemic had an economic impact across all companies. “Even though IT budgets were flat or reduced this year, I’ve spoken to IT executives who expect budgets will increase in 2021. These leaders have focused their budgets on cloud and cybersecurity to better prepare for rapid and unpredictable changes in the future while still helping grow their organizations.
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