Gartner: Brexit will change IT spending patterns

Gartner believes Brexit will have a significant impact on the way businesses spend their IT budgets in 2018, with organisations spending more on software and cloud-based services that offer greater flexibility and favourable conditions compared to long-term, high upfront investments.

Worldwide IT spending will increase to $3.7 trillion in 2018 - growth of 4.5% compared to 2017's numbers, Gartner predicted yesterday.

"Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years," John-David Lovelock, research vice president at Gartner, said. "However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession. Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift."

Enterprise software revenues are already showing strong growth, Gartner's report said, projected to increase by 9.5% over the next 12 months and an additional 8.4% in 2019 to hit $421 billion.

The analyst house predicts organisations will continue to invest in digital business, blockchain and IoT projects, but also move from big data to algorithms, machine learning and artificial intelligence (AI).

"Looking at some of the key areas driving spending over the next few years, Gartner forecasts $2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity," said Mr Lovelock.

"That business value is attributable to using AI to, for example, drive efficiency gains, create insights that personalise the customer experience, entice engagement and commerce, and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data."

He said the key will be spending a chunk of budget on AI technologies in order to unlock their potential business value, especially when trying to find cost savings in the near future. "Spending on AI for customer experience and revenue generation will likely benefit from AI being a force multiplier the cost to implement will be exceeded by the positive network effects and resulting increase in revenue," Lovelock added.

Devices won't experience such significant revenue increases though, growing 5.6% over the next year and 5.7% in 2019. End user mobile device revenues will creep up slightly because they will cost more, although PC growth isn't so encouraging, with Gartner predicting revenues will remain flat.

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