AI and SaaS to boost enterprise software spending
Market analysis firm Gartner has forecast that businesses will be spending far more on IT software going into 2018, with AI and digital transformation projects spurring greater expenditure.
According to the firm’s latest IT spending forecast, IT spending on enterprise software will see the biggest growth, with worldwide spending growing by 9.5 per cent in the next year and 8.4 per cent in 2019.
In total, Gartner predicts that enterprises will spend $421 billion (£305 billion) on software in 2019. Total IT spending is set to swell by 4.5 per cent in 2018 compared with the previous year, reaching $3.7 trillion overall.
In light of this growth companies will also change how they allocate their IT spending, the report continues, with an increasing proportion of corporate budgets shifting towards software as a service (SaaS) products.
The report’s authors attribute this to the development and availability of new SaaS solutions which are applicable across industries, including human capital management software and analytic applications.
Gartner’s research vice-president John-David Lovelock said that further growth is “expected over the next few years” but macroeconomic factors could influence how the market progresses.
He explained: “Uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations and a possible global recession.”
Lovelock added that he anticipated spending patterns would shift towards further development of blockchain technology, the internet of things and from big data towards machine learning and AI.
AI alone could be responsible for $2.9 trillion of new business value opportunities, according to Gartner’s report, as well as recapturing some 6.2 billion hours of employee productivity.
Lovelock added: “Spending on AI for customer experience and revenue generation is likely to benefit from AI being a force multiplier – the cost to implement will be exceeded by the positive network effects and resulting increase in revenue.”
