Gartner: Global Cloud-based Software Spending Up 7.1 percent in 2019

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The shift of enterprise IT spending from traditional (non-cloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market. In 2019, the global cloud-based software market is projected to reach $427 billion, up 7.1 percent from $399 billion in 2018, according to the latest forecast by Gartner.

The largest cloud shift has so far occurred in application software. However, Gartner expects increased growth for the infrastructure software segment in the near-term, particularly in Integration Platform as a Service (iPaaS) and Application Platform as a Service (aPaaS).

Worldwide IT spending is forecast to total $3.79 trillion in 2019, an increase of 1.1 percent from 2018, according to Gartner’s latest forecast. “Currency headwinds fueled by the strengthening U.S. dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter,” said John-David Lovelock, research vice president at Gartner. “Through the remainder of 2019, the U.S. dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars.”

Global Server Market, Artificial Intelligence

The data center systems segment will experience the largest decline in 2019 with a decrease of 2.8 percent. This is mainly due to expected lower average selling prices (ASPs) in the server market driven by adjustments in the pattern of expected component costs.

Gartner John Lovelock
“AI is having a major effect on IT spending, although its role is often misunderstood,” said John-David Lovelock, research vice president at Gartner.

“Disruptive emerging technologies, such as artificial intelligence (AI), will reshape business models as well as the economics of public- and private-sector enterprises,” added Mr. Lovelock. “AI is having a major effect on IT spending, although its role is often misunderstood. AI is not a product, it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry. Gartner’s AI business value forecast predicts that organizations will receive $1.9 trillion worth of benefit from the use of AI this year alone.”

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner customers in ‘Gartner Market Databook, 1Q19 Update.’