Rebound in IT spending expected in 2021

IT spending is expected to rebound in 2021, after last year's pandemic-related uncertainty drove sales down significantly.

In its 2021 forecast released this week, Gartner predicted spending would increase 6.2% year to year, to $3.9 trillion. In 2020, companies spent 3.2% less than in 2019, or $3.7 trillion.

Gartner projected higher spending in each of the five IT spending categories it tracks. Enterprise software, including productivity applications, operating systems and security software, has the highest growth, at 8.8%.

Companies will spend 8% more on tablets, laptops, smartphones and other mobile devices, Gartner predicted. Spending on data center infrastructure, such as servers, Ethernet switches and routers, is projected to increase by 6.2%.

Gartner forecast a 6% bump in IT services, a category that includes consulting and product support.

Communications services will grow the least, at 4.5%. Gartner includes mobile phone plans and internet connectivity in that group.

The research firm is not alone in predicting a recovery. Enterprise Strategy Group* (ESG) surveyed 664 senior IT and business professionals and found 60% expected to increase spending from last year. A Credit Suisse survey of 77 CIOs in companies with more than $1 billion in revenue found a 1.1% improvement in IT budgets, following a decline of 0.4% last year.

ESG's survey had IT leaders prioritizing public cloud services and cybersecurity, with 68% and 66%, respectively, planning to spend more in those areas. Survey respondents said dealing with security vulnerabilities was the biggest challenge in supporting remote work.

In 2020, enterprises focused on the technology to make remote work possible, Gartner research vice president John-David Lovelock said. In 2021, companies will shift spending toward making remote work more secure and productive. Gartner expects remote work-related IT spending to reach $332.9 billion in 2021, up 4.9% from 2020.

"We did [remote work] big -- now we have to do it better," Lovelock said.

The COVID-19 vaccine rollout will take time, meaning remote work, remote learning, store closures and government restrictions will persist well into 2021, he said.

Even after pandemic restrictions ease, industry observers expect a continued need to support remote work. Forrester Research analyst Andrew Hewitt projected that remote work will remain at 300% of pre-pandemic levels, with about one in five employees permanently remote. Many more will participate in hybrid work models.

"There's going to be remote working in the vast majority of organizations," he said.

Mike Gleason is a reporter covering end-user computing topics such as desktop management. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily News, Walpole Times, Sharon Advocate and Medfield Press. He has also worked for newspapers in Central Massachusetts and Southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.

*Enterprise Strategy Group (ESG) is a division of TechTarget.