COVID-19 created a pullback in most forms of IT investment in 2020. But it also created a new normal; strong and sustained growth through to 2024.
The socio-economic disruption created by the outbreak of COVID-19 caused a world-wide reduction in enterprise IT spending of 3.6% (Gartner, 2021) in the 2020 calendar year. Research suggests the rebound through to 2024 will be strong, with some technologies and industries expected to experience double digit compound growth in investment as they enter a new norm of IT expenditure.
This article provides bite sized information about the opportunities over the next 4 years as the predicted acceleration of IT investment plays out.
Will the growth in IT investment occur more in some industries and less in others?
The global recovery in IT spending will be broad with most industries expected to invest more through to 2024.
Gartner report that Education, Healthcare, Banking and Finance along with Insurance all forecast stronger growth levels in IT investment through to 2024. Even industries hardest hit by the pandemic such as Retail and Transportation are forecast to grow their investment over the 5-year period, although when you look at the data more closely these industries take longer to enter into growth, later into 2022, possibly 2023.
What will be invested in?
Cloud proved itself in 2020 its scaled up when required, and down when not required and it worked well for many during the pandemic, unlike some examples of on-premise hardware experienced by my contacts. Enterprises with less cash than normal are expected to drive exceptional growth in cloud alternatives. Cloud is expected to grow at 18.4% Gartner, 2021, in 2021. But there are also some less obvious winners over a 5-year period. You can see cloud-based SaaS products ERP/CRM featuring strongly along with other types of software development, consulting will also be an important enabler.
Where will this growth occur?
In short predominantly in Western Europe, North America and the more developed parts of Asia, including and especially China. Latin America, Eastern Europe and Africa will lag this recovery rate as their economy’s take more time to recover from the COVID-19 pandemic.
Why is there expected to be growth, what driving it?
Enterprises are increasing digital business transformation as they struggle to embrace remote work, automation and contactless customer experiences. Tactical short term rapid implementations deployed at the beginning of the pandemic will now be backed out and replaced or augmented with more strategic long-term solutions. The COVID-19 crisis and ongoing recovery has made clear the power of information, automation and transformation.
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