Global IT spending is expected to grow 3.2% this year
Sentiment toward technology stocks has soured, causing the tech-heavy NASDAQ Composite to fall ~13% since October. Although the tech sector’s growth may not completely dissipate—global IT spending is projected to rise 3.2% YoY (year-over-year) to $3.77 trillion this year, according to Gartner—it is expected to slow down. Gartner estimates that global IT spending grew 3.9% YoY to $3.65 trillion last year, and expects spending on newer Internet-of-Things, AI, and blockchain technology to increase.
Enterprise software expected to drive more spending
Gartner expects growth to continue to be driven by spending on the cloud, a high-growth area within the tech sector. The research company forecasts that cloud software will grow 22% this year, while spending on enterprise software will grow 8.5%. Cloud companies such as Twilio (TWLO) and Workday (WDAY), which offer software-as-a-service, have been seeing tremendous growth.
Meanwhile, spending on devices is projected to grow just 1.6% this year, despite dwindling mobile phone sales. Gartner expects IT global spending to slow further next year, by 2.8% YoY.