IT spending worldwide is on track to hit $4 trillion. State CIOs want to be innovative, but find it hard to achieve. And IT infrastructure budgets are in the cloud.
That’s the latest in IT market research. Here’s your tech provider’s roundup.
Global IT spending: nearly $4 trillion
IT spending worldwide will total $3.9 trillion this year, Gartner predicts, an increase over 2019 of 3.4%.
“Businesses are redoubling investments in IT as they anticipate revenue growth,” says Gartner research VP John-David Lovelock.
The fastest-growing sector? That would be software. Gartner predicts software spending will rise this year by just over 10%, reaching $503 billion worldwide. Much of that is being driven by cloud-based Software as a Service (SaaS) offerings.
The next-fastest sector, according to Gartner’s forecast, will be IT services. Spending there is predicted to grow 5.5% this year, to $1.08 billion.
What about fears of an economic recession? Not to worry. Gartner’s Lovelock calls recession “not the most likely scenario for 2020 and beyond.”
State CIOs: mind the innovation gap
Stop thinking of public-sector CIOs as stodgy, at least in their aspirations. In a new survey, 83% of U.S. state CIOs call innovation an important or very important part of their day-to-day leadership responsibilities.
But there’s a problem: Only 14% of the CIOs say their organizations have actually achieved extensive innovation initiatives.
The findings are based on a survey of 35 U.S. state CIOs conducted jointly by consulting firm Accenture and the National Association of State Chief Information Officers (NASCIO). The two organizations published their survey results this week in a report, The Future State CIO: How the role will drive innovation.
So what’s creating this huge gap between aspiration and achievement? Nearly two-thirds (63%) of survey respondents blame a lack of funding, making it the most frequently cited barrier.
Another barrier to innovation: a lack of executive support. Only about 1 in 4 (26%) respondents say their state administrative leadership has made innovation a priority.
Yet another barrier is the workforce skills shortage. A large majority (85%) of respondents say they struggle to find workers with the skills needed for innovation. And about half (46%) say the lack of skills is their top barrier to innovation.
What state CIOs seem to need now is a more innovative approach to innovation.
Cloud infrastructure: spending down
Talk about clouds with silver linings: Worldwide spending on cloud infrastructure products fell by nearly 2% in the third quarter of 2019. But it still exceeded spending on non-cloud IT infrastructure for the second time ever.
That’s according to new figures from market watcher IDC. It says Q3:19 revenue for cloud infrastructure products – including servers, enterprise storage, and Ethernet switches – totaled $16.8 billion. For the year-earlier quarter, spending on these products totaled $17.13 billion, IDC says.
The decline was driven in part by public cloud providers, who are going through a downturn of their own after a remarkably robust 2018. Another factor was the growth of demand for private clouds. Still, public cloud accounts for most of the spending on cloud IT environments, IDC points out.
Sales of IT infrastructure into traditional, non-cloud environments fell by an even steeper 7.7% in last year’s Q3. IDC expects full-year sales for this sector will drop by about 5% as the industry continues its move to the cloud.
IDC expects that in the future, cloud infrastructure spending will consistently exceed that for non-cloud. But in the past, it's only happened once before, in Q3 of 2018.
It's a "winner takes most" market. IDC finds that in Q3:19, the top 5 vendors in cloud IT infrastructure by revenue – Dell, HPE, Inspur, Cisco and Lenovo – collectively took in 45% of the sector’s total sales.
IT budget-makers clearly have their heads in the cloud.