Gartner Predicts $300 Billion Less IT Spending, More Spending on Cloud Services and Automation (forbes.com) 33
An anonymous reader quotes Forbes:
In a new report, research firm Gartner says it thinks global tech spending will drop 8% in 2020 based on what it is hearing from tech suppliers and other sources. It's forecasting that $3.46 trillion will be spent on IT products and services this year by businesses and consumers, down from $3.76 trillion in 2019. Gartner's estimate is the latest in a series of predictions by research firms that have become more and more pessimistic as the crisis has deepened. Last month, Enterprise Technology Research, which regularly polls IT leaders about their spending intentions, came up with a forecast suggesting a drop of around 5% in global spend for 2020...
While some companies are cutting big IT projects altogether, others are ploughing ahead but delaying some elements of their plans to save money... The research firm, which isn't betting on a rapid V-shaped economic recovery, reckons IT spending in some of the worst hit sectors such as airlines and hotels could take more than three years to rebound to 2019 levels.
Although Gartner expects all of the major categories of IT investment to drop sharply this year...spending in some sub-categories could still soar as companies accelerate digital transformation strategies. Cloud computing is a good example: Gartner expects money spent on public cloud services to rise by 19%. "Companies have to be more digital than they had planned to be," says John-David Lovelock, Gartner's chief forecaster. Software that automates processes is also likely to benefit as executives push hard for greater efficiencies. A survey of 867 finance chiefs across 24 countries and territories conducted in early May by consulting firm PwC found that almost half of the CFOs expected to increase automation of operations...
While some companies are cutting big IT projects altogether, others are ploughing ahead but delaying some elements of their plans to save money... The research firm, which isn't betting on a rapid V-shaped economic recovery, reckons IT spending in some of the worst hit sectors such as airlines and hotels could take more than three years to rebound to 2019 levels.
Although Gartner expects all of the major categories of IT investment to drop sharply this year...spending in some sub-categories could still soar as companies accelerate digital transformation strategies. Cloud computing is a good example: Gartner expects money spent on public cloud services to rise by 19%. "Companies have to be more digital than they had planned to be," says John-David Lovelock, Gartner's chief forecaster. Software that automates processes is also likely to benefit as executives push hard for greater efficiencies. A survey of 867 finance chiefs across 24 countries and territories conducted in early May by consulting firm PwC found that almost half of the CFOs expected to increase automation of operations...
Not my experience (Score:3)
Our cloud spend will increase for sure, but I don’t expect any reductions in on-prem IT budget, more likely a modest increase. We are deferring a couple projects that were targeted to reduce costs, but it is mainly to free up time for other initiatives.
But, we are a small business and have only seen a modest impact to revenue thus far.
Gartner Predictions (Score:3)
Whatever Gartner predicts the exact opposite is sure to happen. There has never been a bobble-head pundit so consistently completely wrong as Gartner. Except of course for weather forecasters, which get more and more unreliable as they depend more and more on "computer models" rather than observation.
Re: Gartner Predictions (Score:1)
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Everytime I see one of these "Gartner predicts" pieces I ignore them.
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Re: Cant wait to see the fearmongers suffer (Score:1)
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Every major country is more or less doing the same thing. Are they also out to "get Trump"? I doubt most countries give a fuck about Trump. He's merely distant entertainment.
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WTF are you rambling about? Ventilatorgate? That's a new one.
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It looks like fine-tuning the technique as more experience is gained: when to use what tool. It is a NOVEL virus. Sorry, I don't see any conspiracy there. Put away your Conspiracy Goggles.
Let me fill you in... (Score:1)
Your an automotive supplier with 100 plants and your paying $10 million a month to keep the lights on. Why? You rent the buildings, you do not own the machines you have a loan on them, you use SAS and the cloud and all your data is in the cloud. Cloud firewall and Cloud end station security. Your database is also in the cloud.
You have almost no orders and your trying to pay for all that cheap stuff that in the past you owned and could just power down...
I can tell you your not going to make it!
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On contraint on on-prem is supply chain (Score:2)
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Switching was long lead times in January, too, but it's gotten worse. I told customers to buy now while the market is nearly normal because it's possible there may be supply chain problems due to COVID, the economy, or whatever. Things might go up in price or just be very slow to get.
I haven't seen people move to the cloud for supply chain reasons. The costs are still ridiculous. I'm most exposed to Azure (not out of choice) and $2k a year to run a domain controller VM in Azure is crazy town pricing and
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I just don't understand the accountant's logic, mostly because I think the ratio isn't a 1:1 capex vs. opex over 5 years. It's more like 1:2.5, or worse over the lifetime of on-premise. I just can't grok why spending $4 million for cloud at $800,000 per year is more beneficial than $2 million up front for the same time period.
My only guess is that cloud vendors are discounting tremendously for larger clients and making it closer to 1:1 over the lifetime of on prem technology, with the idea that they're bu
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You also have to remember, it's not all costs. There are savings that can make up for some of the price. I have one customer who shut down a massive data center after a multi-year cloud migration. So that's a physical building, taxes, equipment, power, and about 15 people off the books.
B2B IT spend drops, but retail spend spiked... (Score:2)
Retail IT spend spiked, as people hasted to buy work-from-home / study-from-home infrastructure.
While the retail spike will dampen, home IT maintenance costs will bulge... ... an HDMI cable here, a headset there, an old 24" LCD that died on being used intensively....
Less IT Spending (Score:1)
Who cares what those clowns say? (Score:3)
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No no no...you have it all backwards.
They're incredibly useful if you cherry pick studies that say what you want to/are/did do was a good idea. The bean counters love that stuff.
Just don't make any actual business decisions based on their recommendations of course. Aren't they the same idiots who said how 'all employees love open plan seating and hate offices/cubicles' ... see? Great for justifying the nonsense and, in reality, saving tons in real estate costs while packing people in like sardines...now
Gartner Reputation (Score:1)
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If an IT direction has a functional brain, they ask their fellow IT directors and employees after getting general direction from upper management. Pre-CV19 there were countless IT conventions on practically every topic imaginable.
Advertisement from the CLOUD people (Score:2)
So you want me to move my data and services to your servers... and then be completely unable to cut spending when times are tight because you will turn things off if we don't pay the monthly bill.
Hello? If money is an issue for an established company, it is a lot cheaper to have good IT staff to keep old systems working longer until money comes back in. Moving it to the cloud just means they have you by the balls with no recourse.
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In theory, moving to the cloud saves money. If you're a small business, it likely does in fact.
Outside of that, medium and large businesses can't just stop IT spend - recurring licensing and maintenance and support costs still exist though they're generally less and you have to factor in staff cost.
Back to the cloud theory - anything beyond a standard implementation winds up being more complex and costly. Anything where you maintain control of your data (in some manner at least) is even more complex and e
Checks tasks for the week (Score:3)
Just last week our owner asked (forgive him) why we need a server, I thought our "app was a website". lol. Websites need servers but I'll give you the benefit of the doubt - may you meant to ask why we need a server here. I told him we spent about $700 on hardware 8 years ago. There is no way we'd have the same performance for the same price, or less, if we were paying someone monthly.
To each is own. We use the Cloud for redundancy, never a replacement