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IT outlay hikes 5.6% in 2021

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IT outlay hikes 5.6% in 2021

Software to see the biggest gains

IT spending in Thailand should rebound next year with projected growth of 5.6%, led by the software segment, says global research and advisory firm Gartner.

According to Gartner’s report on the global IT spending outlook, total IT spending in Thailand is expected to reach 659 billion baht in 2021, up from an estimated 624 billion this year.

In 2021, software spending is projected to surge 13.8% to 46.3 billion baht, the strongest growth among IT segments, followed by data centre systems (12.3%) and devices (12.1%).

This year IT spending in the country is projected to plunge 6.8% to 624 billion baht, which is in line with the global trend, weighed down by the pandemic.

Software is the only segment projected to see growth this year with a 1% rise to 40.6 billion baht.

From 2020-2021, communication services are the IT segment projected to see the most spending in the country: 349 billion baht and 359 billion, respectively, for the two years.

At the global level, Gartner said IT spending is projected to surge 4% to US$3.7 trillion in 2021. Spending this year is expected to fall 5.4% to $3.6 trillion year-on-year.

“In the 25 years that Gartner has been forecasting IT spending, never has there been a market with this much volatility,” said John-David Lovelock, research vice-president at Gartner.

“While there have been unique stressors imposed on all industries as the ongoing pandemic unfolds, the enterprises that were already more digital going into the crisis are doing better and will continue to thrive going into 2021.”

The biggest rebound in 2021 is expected to be in the enterprise software segment, with a projected growth of 7.2% to $492 billion, driven by digitalisation efforts by enterprises that support remote working and other virtual services, such as distance learning and telehealth.

Other sectors expected to gain next year are data centre systems (5.2%), IT services (4.1%) and devices (4.0%).

Gartner indicates in 2021, data centre operators will accelerate global data centre development.

Despite the increase in cloud activity in 2020 as organisations shifted to a remote work environment, enterprise cloud spending — which falls into multiple categories — will not be reflected in vendors’ revenue until 2021.

“The spending slowdown that took place from roughly April through August of this year, coupled with cloud service providers’ ‘try before you buy’ programmes, is shifting cloud revenue out of 2020,” said Mr Lovelock.

“Cloud had a proof point this year — it worked throughout the pandemic, it scaled up and it scaled down. This proof point will allow for accelerated penetration of cloud through 2022.”

He said companies with less money will be more likely to pull money out of device segments, such as mobile phones and printers.

Chief information officers will spend more in the areas that boost digital business, such as customer relationship management software, Mr Lovelock said.