Businesses are freezing spending on devices and data centres and significantly upping their investment in software and IT services.
Gartner’s latest IT spending report shows the trend of spending less on hardware and data continuing into 2019. Spending on devices will grow a paltry 0.9% in 2019, mostly accounted for by product refreshes, while spending on data centres is set to decrease by 0.2%.
In contrast, spending on software will increase by 8.4% next year, while outlay on IT services will grow by a further 4.6%.
Changing IT priorities
The decline of spending on devices is easy to understand. After the hype surrounding the importance of tablet computers and smartphones subsided, businesses have realised that investment in this area yields little return. Yes, slow and outdated machines halt productivity and stifle innovation, but computers and devices have become so powerful that product refresh cycles have lengthen dramatically.
Similarly, the reduced spending on data centres is easy to understand, as most businesses are choosing cloud-based, pay-as-you-use options for their data concerns.
The return of software and IT services
The spending on software is also easy to understand. Investment that was cut during the recession – and the short-term obsession with devices – meant that enterprise software was badly neglected. Now with prices lower, solutions easier to source and switch on and off depending on demand, software has returned as a priority – in a big way.
Along with the resurgence in software spending, it’s also heartening to see IT services being given investment. Organisations have realised that while rudimentary services can be outsourced to MSPs for low costs, core IT services are too nuanced and important to be sent out to tender. This means that IT services, once in danger of being treated as a business commodity, has a healthy future at the core of the business activities.