CompTIA has published its annual report for the IT industry, which suggests that spending on IT is starting to return to historic levels. The CompTIA report, in fact, cites data from International Data Corp (IDC) projecting that global IT revenue will reach $5 trillion in 2021.
This compares to $4.8 trillion that IDC expects will be spent on IT in 2020, a decline from its initial $5.2 trillion estimate made before the arrival of the COVD-19 pandemic.
The challenge now is determining how IT budgets will be allocated. Historically, CompTIA notes hardware, software and services account for 56 percent of the global total. Telecom services account for 26 percent of spending in a typical year, while the remaining 19 percent is usually allocated to emerging technologies that either don’t fit into one of the traditional buckets or span multiple categories.
Going into 2021, what’s unknown is the degree to which the economic downturn brought on by COVID-19 might change historic spending patterns. For example, a survey of 350 CIOs and CTOs conducted by IEEE finds more than half (52 percent) of CIOs and CTOs see their biggest challenge in 2021 will be dealing with aspects of COVID-19 recovery, including permanent hybrid remote and office work structure (22 percent), office and facilities reopenings (17 percent), and the management of permanent remote working (13 percent).
Adjustments to be made?
It’s not clear to what how far organizations will go in terms of rethinking their IT strategies as part of those efforts, but it is safe to say more organizations than ever are simultaneously reevaluating their IT strategies. Exactly what impact that analysis will have on IT spending beyond increased reliance on cloud applications is difficult to forecast at a time when economic headwinds could at any time force them to pull back on a project.
The annual IT industry report from @CompTIA suggests #ITspending is returning to historic levels, citing IDC’s projection that global IT revenue will reach $5 trillion in 2021. #MSPbusiness
Nearly one-third (32 percent) of respondents in the IEEE survey, however, did note they will be investing in artificial intelligence (AI) and machine learning technologies in the coming year. Of course, machine learning algorithms and other forms of AI can be embedded into almost anything these days, but the IEEE survey does suggest that the recent downturn – rather than dampening enthusiasm for emerging technologies – may have only increased the level of interest in this area.
MSPs should focus on strategic bets
It’s quite possible an existing service that has reliably driven revenue for years might suddenly become irrelevant. If every customer comes to the same conclusion at the same time, the drop off in revenue from the services could be quite precipitous.
The good news is that IT spending is moving up and to the left, which is always better for MSPs. The issue is determining what technologies are going to be on the upswing at the expense of others. Even in the case of security, a flood of spending does not always lift all boats. In fact, the proverbial IT harbor is littered with technology boats that capsized while a wave of spending lifted others. Whatever the outcome, in 2021, savvy MSPs should be prepared to jump ship the minute the sky above one technology platform or another starts to darken.
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