Cloud plays part in the 0.6% growth of the global IT market

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Cloud plays part in the 0.6% growth of the global IT market

The IT market is predicted to grow by 0.6% to $3.74 trillion this year, according to research company Gartner, Inc.

It is thought that the adoption and development of cloud has made a significant difference in both the rise and fall of various sectors of the IT market.

Cloud’s positive impact

On the positive side, cloud computing is having a huge impact on the growth of the industry with so many companies using it as part of their infrastructure.

As the cloud continues to develop, it’s hoped it will have a greater financial impact on the computing sector and will cover a wider range of application software segments, including collaboration services, content services, and office suites.

John-David Lovelock, research vice president at Gartner said: “Spending in old technology segments, like data centre, will only continue to be dropped.”

Before 2018, the cloud had mostly been used in business process outsourcing and application software.

The negative impact of cloud

However, as a negative, the devices market had the biggest loss of 4.3% from 2018 to $682 billion, with the development of cloud being thought to have an impact on this.  Spending money specifically on IT-based devices (such as PC’s and Laptops) is dropping each year around the world due to saturation and commoditisation as cloud lets these devices have a longer life and needs less powerful equipment to run them.

Lovelock spoke of the development of tech making it harder for devices to grow in profit.

He said: “There are hardly any ‘new’ buyers in the devices market, meaning that the market is now being driven by replacements and upgrades… Add in their extended lifetimes along with the introduction of smart home technologies and IoT, and consumer technology spending only continues to drop.”

The general growth of the IT market

The biggest growth in the IT sector was experienced by Enterprise Software services which had a 9% increase in 2019 with a total profit of $457 billion.

Lovelock continued, “While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019. Despite the ongoing tariff war, North America IT spending is forecast to grow 3.7% in 2019 and IT spending in China is expected to grow 2.8%.”

“Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios in a downturn should one occur,” said Mr. Lovelock.

 

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