Gartner is forecasting that worldwide enterprise IT spending is projected to reach $4.5 trillion in 2022, an increase of 5.5% from 2021, which the research firm notes being a slight decrease from the year before, because more organizations are increasingly building new technologies and software versus buying and implementing them.
Worldwide IT spending for 2021 is also projected to increase 9.5%, which is being driven by the shift to remote work and the need to digitally transform processes. However, the Gartner analysts are suggesting that a significant portion of those transformation initiatives involve asynchronous workflows that are being driven by custom code. As a result, the rate of spending increase for 2022 is expected to decline as organizations rely less on packaged application software to drive what are becoming a series of integrated custom processes.
Most of those efforts involve a range of applications built using both procedural code and low-code/no-code application development platforms. The challenge that organizations will soon encounter is how to further automate the delivery of software as the number of applications that need to be simultaneously deployed and continuously updated rapidly increases. Aspiring to become a technology company is one thing. Operating like one is something most Digital CxOs are discovering is quite another thing altogether.
While there are many organizations that have embraced best DevOps practices to accelerate the building of software, the deployment of software unfortunately remains largely manual despite the availability of continuous delivery platforms. Many organizations are still manually deploying software because each platform that is employed tends to be unique. Of course, it’s hard to automate delivery of software when every platform has its own unique attributes.
There is some hope for standardization in the form of Kubernetes clusters that surface a common application programming interface (API) to make it easier to deploy applications. However, the percentage of applications that will be deployed on Kubernetes clusters is still relatively small. Most organizations don’t have the skills yet to switch their application development and deployment efforts to a complex Kubernetes platform that today requires a lot of expertise on both the part of developers and IT operations teams to master.
Digital CxOs going into 2022 should take some time to truly assess their ability to deploy software as the number of application development initiatives being launched create a potential for deployment bottlenecks that will slow down the rate at which digital business transformation goals can be achieved.
In the meantime, Gartner is forecasting that spending on IT services, including cloud services, will grow at a robust 8.6% to reach $1.3 trillion. That’s on top of the $1.2 trillion that the research firm is forecasting will be spent on IT services in 2021, representing an 11% gain over last year. That level of spending suggests organizations are becoming a lot more dependent on both cloud services and the external IT expertise they need to manage them to achieve their digital transformation goals.
Gartner is still forecasting spending increases across the board, with enterprise software seeing the largest percentage gain in 2022, growing at 11.5% to reach $670 billion. Much of that enterprise software is being customized using a range of application programming interfaces (APIs) and software development (SDK) that enable organizations to bend software to meet their goals versus always having to bend the business to the way an applications vendor has determined it should operate.
It’s also worth noting Gartner is also forecasting a 5.8% growth rate for data center systems, to reach $207 billion and a 2.3% increase on device spending to reach $820 billion. Spending on communications services is forecasted to grow at 2.1% to reach $1.5 billion. The overall percentage of any budget being spent on IT is clearly increasing.
Digital transformation is, of course, not something any organization can buy. It requires a keen understanding of how software is built and delivered. Digital CxOs need to rethink how they can leverage IT resources in the most efficient way possible. In some cases, that may mean relying less on internal IT teams to manage infrastructure so more internal resources can be applied to application development. Conversely, some organizations may decide to outsource application development in favor of continuing to manage IT infrastructure internally. Most organizations will find themselves employing a mix of both, depending on the nature of the use cases.
The important thing to remember is IT is a continuum that constantly evolves, so the less rigid an organization is about how IT resources are acquired and consumed, the more likely it becomes that they will ultimately succeed.