Gartner: Companies shied away data center spending in 2019

Dive Brief:

  • Companies around the world are projected to devote $3.7 trillion to IT spend during 2019, a 0.6% increase from last year, according to a recent report from research firm Gartner.
  • Though on-premise spend will hold steady in 2020, data center spending fell 3.5% this year. Enterprise investment on servers shows a 14% drop in 2019, said John-David Lovelock, research vice president at Gartner, in an interview with CIO Dive.
  • The fastest growing sector of IT investment is enterprise software. Companies are projected to devote $457 billion to software as a service, a 9% growth spurt from last year’s totals.

Dive Insight:

The numbers from the recent report indicate a complex market in a state of transition, one where the cloud continues to exert influence over spending decisions.

Up to now, execs have had a “yes, and” mentality, said Lovelock. Managers had been more open to experimenting with new technology while still maintaining their existing platforms. 

“We’ve had a steady progression of IT spend since the early 90s,” the analyst said. “For the first time, companies are saying, ‘there are things we can give up doing now in order to do something new.'”

That said, with 98% of businesses keeping on-prem systems running, many industries continue to hold on to their mainframes.

“Especially everything in supply chain management, procurement and planning,” said Lovelock. “Most of this type of software is extremely customized. In large organizations they’re multimillion-dollar systems to start, and they’ve had over a decade of customization.”

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